Skip to Content
0
Mar 27, 2009 at 12:36 PM

Distribution of Additional Expenses/Freight in A/P Invoice

25 Views

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