07-14-2011, 04:09 PM
How to journalize Goods Receipt with Downpayment ?
Accounting problem
Company XYZ makes a Purchase Order to company ABC for 10 pcs of item A @ 1,000 each. The total amount based on the PO is 10,000. It also pays a downpayment of 5,000 by Cash.
Company ABC send the items ordered in 2 separate shipments as follows
Shipment 1 Company ABC send only 4 pcs of item A and is received by Company XYZ warehouse.
Shipment 2 Company ABC send only 2 pcs of item A and is received by Company XYZ warehouse.
It also sends Invoice as follows
Invoice 1 Instead of charging 1,000 per item as in the PO, it charges 1,100
Invoice 2 Instead of charging 1,000 per item as in the PO, it charges 1,100
This is how I journalize it, but I'm not sure if it's correct
Making the PO and paying Downpayment
Downpayment Dr. 5,000
Cash Cr. 5,000
Receive Shipment 1 using Goods Receipt
Inventory - A Dr. 4,000
Accrued Accounts Paybale Cr. 4,000
Receive Invoice 1
Inventory - A Dr. 400
Accrued Accounts Paybale Dr. 4,000
Downpayment Cr. 4,400
Accounts Payable Cr. 0
Receive Shipment 2 using Goods Receipt
Inventory - A Dr. 2,000
Accrued Accounts Paybale Cr. 2,000
Receive Invoice 2
Inventory - A Dr. 200
Accrued Accounts Paybale Dr. 2,000
Downpayment Cr. 600
Accounts Payable Cr. 1,600
Is that the correct way to journalize it? When goods are received, I use the price from the PO to get the amount. When Invoice is received and there's a price difference I use the price from the Invoice. I also deduct the amount from Downpayment when I receive the Invoice not when goods are received.
So, if anyone can help me out, it'd be greatly appreciated. thanks!
Accounting problem
Company XYZ makes a Purchase Order to company ABC for 10 pcs of item A @ 1,000 each. The total amount based on the PO is 10,000. It also pays a downpayment of 5,000 by Cash.
Company ABC send the items ordered in 2 separate shipments as follows
Shipment 1 Company ABC send only 4 pcs of item A and is received by Company XYZ warehouse.
Shipment 2 Company ABC send only 2 pcs of item A and is received by Company XYZ warehouse.
It also sends Invoice as follows
Invoice 1 Instead of charging 1,000 per item as in the PO, it charges 1,100
Invoice 2 Instead of charging 1,000 per item as in the PO, it charges 1,100
This is how I journalize it, but I'm not sure if it's correct
Making the PO and paying Downpayment
Downpayment Dr. 5,000
Cash Cr. 5,000
Receive Shipment 1 using Goods Receipt
Inventory - A Dr. 4,000
Accrued Accounts Paybale Cr. 4,000
Receive Invoice 1
Inventory - A Dr. 400
Accrued Accounts Paybale Dr. 4,000
Downpayment Cr. 4,400
Accounts Payable Cr. 0
Receive Shipment 2 using Goods Receipt
Inventory - A Dr. 2,000
Accrued Accounts Paybale Cr. 2,000
Receive Invoice 2
Inventory - A Dr. 200
Accrued Accounts Paybale Dr. 2,000
Downpayment Cr. 600
Accounts Payable Cr. 1,600
Is that the correct way to journalize it? When goods are received, I use the price from the PO to get the amount. When Invoice is received and there's a price difference I use the price from the Invoice. I also deduct the amount from Downpayment when I receive the Invoice not when goods are received.
So, if anyone can help me out, it'd be greatly appreciated. thanks!