Purchase & sale from same party

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

06 April 2013 I have purchased goods of Rs500000/ from a party on credit after paying Vat @4% on 25-8-2012. On 25-9-2012 I have sold goods of RS550000/ to same party incloding Vat of 4%. Since I HAVE TO MAKE PAYMENT TO THE PARTY CAN I ADUST THE PAYMENT WITH PAYMENT I WILL RECEIVE. HOW I HAVE TO MAKE THE ENTRY. Please help me immediately.

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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06 April 2013 Yes, you can adjust your receipt with your payment. The entries is as follows

At the time of purchase i.e on 25-8-2012

Purchases a/c dr 480769
Vat Input a/c dr 19231
TO Mr. X a/c 500000
(Being credit purchases made from the Mr.X vide invoice no.XXX)

At the time of sale to Mr.X i.e on 25-9-2012

Mr.X a/c dr 550000
TO Sales a/c 528846
TO Vat Output a/c 21154
(Being Credit sales made to Mr.X vide invoice no.XXX)

At the time of balance amount received from Mr.X

Cash/bank a/c dr 50000
To Mr.X a/c 50000
(Being amount received through cheque no.XXX vide r.no:XXX)

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