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Recording of goods purchase
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 ?
Replies (10)
Quick Summary
On the purchase value always and record a gain
What are the entries for it ?
Recording of goods purchased worth Rs.1 crore from a company which supply goods.
What will be the treatment for 5 lac benefit
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.
Can we record it as discount received?
Discount received where there is discount?
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.
Which treatment will be appropriate sir
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
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