A/c entry urgent guidence needed

Dimple Kotak (Accounts & Tax ) (185 Points)

14 June 2012  

I am having 1 query regarding a/c entry

Owner of m/s A & m/s B is the same person. M/S C is dealing with both of these.

A is creditor of C and B is debtor of C. C purchased goods from A without VAT(Eg. Rs.100) and returned those goods with VAT (Rs.112.5) Now while making payment B made lower payment by Rs.112.5/- saying that it was adjusted against return to A.

Now the question is what entry will come for all these.

I saw the entry in this case was 1. Purchase from A

2. Sales to B

3. A    Dr. 100, a/c write off    dr.12.5   To B         112.5

But I think B should not pay less amt as goods purchased from A were returned to A so the transactions ends except that VAT portion.

 

Please Advice Urgent