A/c entry urgent guidence needed

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I am having 1 query regarding a/c entry

Owner of m/s A & m/s B is the same person. M/S C is dealing with both of these.

A is creditor of C and B is debtor of C. C purchased goods from A without VAT(Eg. Rs.100) and returned those goods with VAT (Rs.112.5) Now while making payment B made lower payment by Rs.112.5/- saying that it was adjusted against return to A.

Now the question is what entry will come for all these.

I saw the entry in this case was 1. Purchase from A

2. Sales to B

3. A    Dr. 100, a/c write off    dr.12.5   To B         112.5

But I think B should not pay less amt as goods purchased from A were returned to A so the transactions ends except that VAT portion.

 

Please Advice Urgent

 

 

Replies (1)

journal entry in the books of m/s C 

1. purchase a/c            Dr     100

               To m/s A                               100

2. m/s B a/c                  Dr     112.5

                To sales                               100

                 To VAT                                  12.5

3. m/s A                        Dr     100

                 To m/s B                               100

after the above transaction in the books of C

available 12.5 Dr balance of m/s B

and it is required to m/s B pay the balance amt to m/s C

 


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