What is the journal entry for goods sold for free of cost as complyment for sales done in tally? should VAT include in the cost?
Thanks in advance for all your replays.
T.S.Mohana Harish
Madurai
Mohana Harish (AUDIT TEAM LEAD - CA FINAL) (468 Points)
27 February 2013What is the journal entry for goods sold for free of cost as complyment for sales done in tally? should VAT include in the cost?
Thanks in advance for all your replays.
T.S.Mohana Harish
Madurai
Tushar Thakar
(student)
(57 Points)
Replied 27 February 2013
shivam gupta
(Student)
(142 Points)
Replied 27 February 2013
Journal Entry:-
Free Samples A/c Dr. Cost + VAT amount
To VAT Receivable VAT Amount
To Purchase A/c Cost
Remember as per VAT laws if an item purchased on which Input tax credit has been paid & enterprise use that goods for manufacturing of Non- taxable Goods or Exempt Goods or distributed as free samples
then the VAT receivable amount recorded at the time of purchase to the extent which has now been given as free Samples shall be reversed.
That is why i mentioned " VAT Receivable A/c" instead of " VAT Payable A/c"
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