Goods are ordered using a foreign currency and need to include GST as the supplier is in Australia. Any foreign currency purchase orders does not allow GST to be included.
Step-by-step guide
There are two results we need to have happen here - firstly to get the correct values for your BAS reports and secondly, raise the liability for the GST due. There are two options to enter the relevant data in for your BAS report and creditors - the Value Of Taxable Import tab in Landed Cost or Creditor Purchases and Creditor Credit Adjustments.
Example - 10,000.00 Ex GST Total + 1,000 GST
Option 1 - Value of Taxable Import
When using the Shipment form to enter the GST invoice, the check box Use Value of Taxable Import must be ticked before the Shipment is set to 'Commit for Booking In'.
- select the creditor and type in Description
- type in the Tax Amount (GST due on the purchase order) and the Amount field is automatically calculated
- select ledger account, type in the Invoice Number
Select the
Journal entry
1. Creditor Purchases for the Total Ex GST Value of the goods posting to COGS account with G11 selected
Debit COGS 10,000 (G11)
Debit GST 1,000 (G11)
Credit Creditors 11,000 (No Code)
2. Creditor Credit Adjustment for Total Ex GST Value selecting No Code posting to the COGS account
Debit Creditor 10,000 (No code)
Credit COGS 10,000 (No Code)
Allocate the credit to the purchase and the balance is the GST amount due to the creditor
Net result is COGS in the P&L is 0
COGS for BAS Reporting is 10,000 G11
GST for BAS Reporting is 1,000 G11
GST in Balance Sheet is Debit 1,000
Creditors in Balance Sheet is Credit 1,000
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