Journal Entry for Cost of Sold for Direct Materials/Factory Supplies

[Former Member]

Hi SAP Gurus,

Our company products do not have taxes because we are under Income Tax Holiday.

However, due to excess materials, we are going to sell those direct materials that will result to tax imposition.

With regards to that, will it be possible to create an entry like this for cost of sold for Direct Materials/Factory Supplies?

Debit          Raw Material Parts                     xxxx

Credit                    Other Income                                  xxxx

To account for Cost and at the same time, it will be deducted on total proceeds from sale.

How will it be possible?Steps for config?Am I going to make another valuation class?Posting keys etc?

Thank you very much.

Best Regards,

Athena

[kurumeti_dhananjayulu]

Ms. Athena,

Can please elaborate you question........ because you are saying that.......... due to excess material..... what it mean exactly.........  (You have already purchased or you have produced)...

Please give a clarity to enable me to proceed further..

thanks

dhana.k

[Former Member]

Hi Dhana K,

Yes we have already produced direct materials, but due to excess volume, these are sold as is (direct materials) instead of processing it into finished products.

Here is the current entry:

For Inventory Posting

For Delivery Note Posting

However, the accounting will have to make a subsequent MANUAL entry for this

Debit            Others(Revenue)               xxxx

Credit                    Cost of Sales                    xxx

To eliminate this MANUAL entry, Accounting suggest if we can have an AUTOMATIC entry like this:

Debit             Raw Material                    xxx

Credit                     Others(Revenue)              xxx

Do we need to have another posting key?valuation class?

Thank you & Best Regards,

Athena

[former_member198650]

Hi Athena,

It is not possible to automate the said entry. You have to pass manual JV.

Regards,

Mukthar