LIVE GST Audit Course by CA Sachin Jain. Register Now!!

Recording of goods purchase

28 January 2023

if firm purchase goods worth rs 1 crore from a company and the company supply the goods worth rs 1.05 crore as the firm is regular customer of the company so at which cost it is recorded ?

Reply
Follow
Share

10 Replies

Yasaswi Gomes new (Finance ) (4486 Points)
Replied 29 January 2023

On the purchase value always and record a gain

Atharv Sankliya (1306 Points)
Replied 29 January 2023

What are the entries for it ?

sabyasachi mukherjee (26132 Points)
Replied 29 January 2023

Recording of goods purchased worth Rs.1 crore from a company which supply goods.

2 Like

Atharv Sankliya (1306 Points)
Replied 29 January 2023

What will be the treatment for 5 lac benefit

Yasaswi Gomes new (Finance ) (4486 Points)
Replied 29 January 2023

Dr Purchases 1 crore

Cr. Bank 1 crore

And

Dr. Inventory 1.5 crore

Cr. closing stock 1 crore

Cr. Gain on inventory .5 lakhs.

1 Like

Atharv Sankliya (1306 Points)
Replied 29 January 2023

Can we record it as discount received?

sabyasachi mukherjee (26132 Points)
Replied 30 January 2023

Discount received where there is discount?

1 Like

Yasaswi Gomes new (Finance ) (4486 Points)
Replied 30 January 2023

Maybe you can record it as a discount instead of gain because it falls within operating profits but sales is shown as net of taxes and discount. This inventory is lower of cost or nrv.so you can show discount on inventory.

1 Like

Atharv Sankliya (1306 Points)
Replied 30 January 2023

Which treatment will be appropriate sir

Yasaswi Gomes new (Finance ) (4486 Points)
Replied 30 January 2023

I'm sort of not a complete consultant. Accounting wise it's easy. There can be company law compliances here which I am not aware of. As per AS standards you can do it like this

Dr Purchases 1 crore

Dr. Inventory 1.5 crore

Cr. Bank 1 crore

Cr. Closing stock 1 crore

Cr. Discount .5 crore