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Mar 27, 2009 at 12:36 PM

# Distribution of Additional Expenses/Freight in A/P Invoice

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Hi,

The additional expenses in the A/P Invoice have been split and I do not understand how this distribution has happened.

We use Moving average price.

Purchase Order for 2 items.

Item-1 for 25kg Unit price \$55.9436 = \$1398.59 plus 5% tax \$69.93 Row total = \$1468.52

Item-2 for 400L Unit price \$5.56 = \$2224.00 plus 5% tax \$111.20 Row total = \$2335.20

Grand Total \$3622.59 plus tax \$181.13 DocTotal = \$3803.72

Goods Receipt PO received for only Item-1:

Debit Inventory A/c: \$1398.59

Credit Allocation A/c: \$1398.59

(No JE for tax figure of \$ 69.93)

A/P Invoice received for Item-1 with additional charges of \$2.08 (distributed on row total)

Total LC \$1398.59 + Additional Charges \$2.08 + 5% taxes \$70.03 = DocTotal \$1470.70

Credit Vendor: \$1470.70

Debit Tax A/c: \$70.03

Debit Allocation A/c: \$1398.59

Debit Inventory A/c: \$1.56 (why?)

Debit Price Diff. Acct.: \$0.52 (why?)

Why has the additional charges been split into two different accounts and how are these figures arrived at - \$1.56 and \$0.52?

Thanks,

Ajay Audich