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Dynamics 365 Community / Forums / Microsoft Dynamics GP (Archived) / How to handle return w...
Microsoft Dynamics GP (Archived)

How to handle return with credit when there is landed cost involved?

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Posted on by Suet Lee 1,345

Hi,

Basically I will like to know what account to charge to when this happens. And will like to know how to explain to customer in detail.

Example, i have received goods and invoice from supplier and I have also received the landed cost invoice from a different supplier. Assuming I received 15 Qty, but in actual fact I should only receive 10 Qty. The cost applies for both receiving and invoice as follow:-

Costing - FIFO Perpetual

Unit Cost - 100

Landed Cost/Unit - 1

So i did a return with credit for the 5 qty. The double entries will be as follow:-

Dr. AP 500

Dr PPV 5

                        Cr. Inv 505

Should the difference of 5 be charged to PPV? Is that correct?

Thanks

 

*This post is locked for comments

  • Stefanie Christiana Profile Picture
    Stefanie Christiana 75 on at
    Re: How to handle return with credit when there is landed cost involved?

    Hi, I have a related follow up.  Should Suet be putting 500 or 505 on the return line?  If she puts 505 then the credit from the vendor will be incorrect.  If she puts 500 then won't the inventory subledger be out of balance from general ledger?  She'd be removing only 500 from inventory value but 505 from GL.  I'm asking because I have this issue right now...not questioning anyone's logic. :)

    My thought was putting 505 on the line and then 5 on the Trade Discount field. That will then create a distribution line as well making it easy to code.  But I thought there must be a supported solution to this.  I searched KB, communities and blogs though and couldn't find anything.

    Thank you!

  • Suet Lee Profile Picture
    Suet Lee 1,345 on at
    Re: How to handle return with credit when there is landed cost involved?

    Hi Ian,

    Thanks.  We will not be getting any credit note for the landed cost.

    Thanks so much for your help.  

    Suet

  • Verified answer
    Community Member Profile Picture
    Community Member Microsoft Employee on at
    Re: How to handle return with credit when there is landed cost involved?

    Hi - you could handle it as above.

    Will you be getting a credit from the landed cost supplier? If so, its distributions will be CR PPV 5 and DR AP 5. Thus cancelling out the PPV posting. You could post the PPV distribution to an account called 'Landed Cost Credits Due' or something like that - rather than let it get mixed up in genuine purchase price variances?

    If you are not going to get a credit for the landed cost, then posting the 5 to the PPV account is fine - at least it hits the P&L immediately, which is correct (You have incurred a cost that needs to be expensed - if the stock wasn't being returned - then the cost would get expensed when the stock is sold...but since the stock will never be sold, you need to expense it straight away, which is what the PPV posting is doing).

    Whatever you do, the basic process is correct. The landed cost hits the P&L immediately.

    Hope this helps,

    Ian.

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