Accounting of Export Sales!!! Very Urgent!!!

This query is : Resolved

Rajesh (Querist)
Follow

20 June 2010 Dear Experts,
Please give me answers for this query, my earlier query relating to this is still pending thats why i have again posted it.Please do take time in reading this and share your knowledge.

If the company makes an export sales for 1 lakh dollars on receiving the sale order dt. 1st march 2010, but Bill of Entry is on 20th march 2010.
But the company takes an forward rate on 1st march 2010 itself to reduce the currency rate fluctuation at 40 rs. per u.s. dollar. You also have the data for forward rate on 20th march 2010 at rs. 41 per u.s. dollar.

On 20th April 2010 the company receives payment for 1 lakh dollars. The spot rate on 20th April per u.s. dollar is 42 rs. per u.s. dollar.
The rate on 31st march 2010 is rs. 39 per u.s. dollar.

Please provide me the entries to be passed in the books of accounts and also in the financial statements.

Waiting for all the experts to reply.

daya shankar singh

daya shankar singh (Expert)
Follow

20 June 2010 Following entry would be made in Financial statement:-
1)ON the date of sale
Debtor A/c dr.4000000
To sale 4000000

2)Entry on last date(31/3/10)
foreign exchange fluctuation a/c dr.100000
To debtor 100000

3)ON 20/4/10
BAnk a/c dr 4200000
TO debtor 3900000
To foreign exc.fluct. 300000

Message likes : 1 times

Rajesh

Rajesh (Querist)
Follow

21 June 2010 Sir is it not the bill of entry date to be considered for booking sales incase of export?
Thanks for answering my query
With regards,
Rajesh.

Upgrade to CAclubindia Pro. Subscribe Now!

Maninder Jain

Maninder Jain (Expert)
Follow

21 June 2010 Dear Rajesh
Normally export sale is booked on the date of Bill of export. So in my opinion the entries are:

(1) Debtor 41 lac
To sales 41 lac

Now the Company has taken forward of 1 lac usd. So both forward & debtor will be reinstated on 31.03.2009

Claims receivable 2 lac
To Debtors 2 lac

On 1 april this entry will be reversed

On 20th April 1 lac usd received. But USd will go to the Bank from which you have taken forward & that bank will pay you forward rate irrespective of the spot rate of 20 march

So the entry will be

BAnk 40 lac
To Debtor 40 lac

& Exchange fluctuation 1 lac
to Debtor 1 lac

Message likes : 1 times