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Dynamics 365 Community / Forums / Microsoft Dynamics AX (Archived) / Stock Treatment and Le...
Microsoft Dynamics AX (Archived)

Stock Treatment and Ledger Entry

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Posted on by Amir Naeem Hassan 19

There is a supplier, buyer and customer relationship. My question is a two way like what will be the treatment in stock count, valuation and what would be accounting treatment in ledger if suppose 1. supplier sells on 5+1 free of cost basis and then sells that to customer on the same basis. Now my question is that what will be treatment in stock and then in ledger provided that if stock is left and scheme closes then that one free of cost item becomes asset.

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  • Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Stock Treatment and Ledger Entry

    Hello Amir,

    Can you provide some more details and ideally a simplified example?

    Is the supplier and the customer the same party and your company the buyer or do you refer to a different scenario?

    Would be great if you could clarify.

    Many thanks and best regards,

    Ludwig

  • guk1964 Profile Picture
    guk1964 10,888 on at
    RE: Stock Treatment and Ledger Entry

    It depends on whether you use actual or standard cost valuation.

    If standard then each piece is held at standard.

    If actual then there will be an averaging logic of total quantity and cost.

    If you want a special purchase price for a special sales order then use marking so as not to affect the cost of other pieces.

    You would not hold some units at zero value.

    Unless marked transactions then the system does not differentiate the cost cor a customer that gets a discount and one that doesn't. The fact that you  bought cheap does not  necessarily mean you want to sell cheap. You overall profit I.e. sales loss purchase is the same no matter how you value inventory but you have to decide how it should affect specific orders and the financial statements while still in inventory I.e .you have to decide the policy Ax will post as you configure the policy.

  • Amir Naeem Hassan Profile Picture
    Amir Naeem Hassan 19 on at
    RE: Stock Treatment and Ledger Entry

    Thanks for responding. Suppose I am a trader and i purchase 50 quantity of item A at $1, then i will get total 60 quantity what will entry in stock if 10 of these are free of cost, and what will journal entry in ledger for this. Now suppose i sale these on the same grounds able to sale 40 quantity then actually stock out would be 48. what will be treatment in stock and in ledger. then again if scheme is closed now and we are left with 12 quantity but want stock value for all of the 12 ones since the 2 we got free of cost are now our saving.

  • Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Stock Treatment and Ledger Entry

    Hello Amir,

    To get this right, please confirm:

    1. You buy 50 pcs for a price of $1 = $50 but you receive actually 60 pcs. That is 10 pcs are given for free from the supplier. Right?

    2. Later you sell 40 pcs out of those 60 pcs that you received. Right?

    I am confused about the 48 and 12.

    Would be great if you could elaborate.

    Many thanks,

    Ludwig

  • Amir Naeem Hassan Profile Picture
    Amir Naeem Hassan 19 on at
    RE: Stock Treatment and Ledger Entry

    1. yes.

    2. yes.

    3. if we sold 40 out of 50 it means stock out would be 48 that is on each of 5 one would be free of cost.

    4. that means out 60 units received 48 have been sold and we are left with 12 only.

    5. at close of scheme we want value for these 12 units as $12 not $10 as we would have 2 units left as saving.

  • Suggested answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Stock Treatment and Ledger Entry

    Hi, 

    I am still a bit confused about the quantities you mention. 

    Here is what I understand.

    a.) You receive 60 pcs for a price of $50 => price/pcs = 0.8333

    b) You sell 40 pcs out of the 60 pcs => your value reduces by 33.33 (40x0.8333) leaving a value of 16.67 on stock and a total quantity of 20

    Does that answer you question?

    Best regards, 

    Ludwig

  • Amir Naeem Hassan Profile Picture
    Amir Naeem Hassan 19 on at
    RE: Stock Treatment and Ledger Entry

    1. the supplier has a scheme for 1 unit free on sale of each 5 units. price $1 for each unit.

    2. the  same scheme is for buyer to his customer.

    3. now if the buyer makes good receipt, he will add 6 units and value would be $5.

    4. Now suppose scheme is closed and the buyer lefts with 6 units, the buyer wants that the quantity should be 6 but the value of stock should be $6 instead of $5.

    5. that is what I am asking in terms of stock entries and journal entries.

  • Suggested answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Stock Treatment and Ledger Entry

    Hi,

    If you have 6 pcs on stock for a value of $5 but want to have a value of $6 then you can make use of the inventory closing and adjustment form where you can increase the value from $5 to $6 for the 6pcs you have on stock.

    This is considered a revaluation / adjustment that you can do usually after an inventory close/recalculation is finished.

    The next blog post shows you some screenprints how this can be realized

    www.loganconsulting.com/.../adjusting-cost-on-inventory-transactions-in-d365-for-finance-and-operations-part-i

    The screenprints are for D365FO but are also valid for AX2012.

    Best regards,

    Ludwig

  • Amir Naeem Hassan Profile Picture
    Amir Naeem Hassan 19 on at
    RE: Stock Treatment and Ledger Entry

    What about stock entries and journal entries for my question.

  • Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Stock Treatment and Ledger Entry

    Hello Amir,

    Can you elaborate on the stock entries / journal entries issue?

    I don't understand what you try to say here especially in regards to the reserve.

    Would be great if you could clarify.

    Many thanks,

    Ludwig

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