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- From the Purchase Order for Perishable Goods from PO to Goods Receipt - open the estimate
- Select a cost estimate line to Link to actual payments made
- Choose the supplier that you paid (or you have an invoice for)
- Choose from a list of invoices / payments from that supplier
- Note that the list of invoices is filtered by (1) those against a GL account flagged as a Landed Cost Account that have not yet been associated with a landed cost
- Determine the amount to use for this landed cost calculation (you can change this later)
- Add additional payments there were more costs than contained in the estimate
- Action Button: Calculate Actual Average costs
- Review calculations and adjust manual allocations in the grid
- Use status when ready to apply
- Application will then compare the estimated landed costs with the actual landed costs
- Where changes are to be made
- The average cost of the article will be adjusted to the new average cost
- Journals will be written including clearing out any balance in the clearing account
- Where changes are to be made
- Application will then compare the estimated landed costs with the actual landed costs
- The status will then move to Actual used.
Landed costing diagram of the flow.
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- Use estimated values in order to receipt the stock to store and arrive at an approximate cost
- Update the cost once the actuals have been received.
Accounting Journals
| Journals for receipt of Stock item with locked estimate | Debit | Credit | Estimate of $20 costs |
|---|---|---|---|
| Stock on Hand - assets | 120 | Increase in stock value | |
| Trade Creditors Liabilities | 100 | Amount paid to stock supplier | |
| Landed cost clearing account - liabilities | 20 | Total allocated other costs for these items based on the estimate | |
| Totals | 120 | 120 | |
| Stock Supplier Invoice | Dr | Cr | Payment to supplier for stock |
| Trade Creditors - Liabilities | 100 | ||
| Goods Received not Invoiced | 100 | ||
| Total | 100 | 100 | |
| CR Invoice Journal for a cost paid (customs) - no changes required | Dr | Cr | Payment of $25 costs |
| Trade Creditors - Liabilities | 25 | ||
| General Cheque Account - Assets | 25 | ||
| Totals | 25 | 25 | |
| Adjustment journal required once actuals are associated | Dr | Cr | Adjustment of stock from $20 estimate to $25 Actual |
| Landed Cost Expenses To Stock - Expense Account | 25 | Expense account tracking landed costs in separate account | |
| Landed cost clearing account - liabilities | 20 | Clear the clearing account of the estimate value | |
| Stock on Hand - Assets - Credit | 5 | Update the stock on hand with the increase (Decrease) in value required | |
| Totals | 25 | 25 | Result = Stock increases $5 (now $25 more than paid to stock supplier) and Landed Cost Clearing account = 0 Landed cost expense account = Actual = $25 |
| Adjustment Journal if Actuals are used prior to stock receipt | Dr | Cr | When $25 actuals are known prior to receipt of stock |
| Stock on Hand - assets | 125 | Increase in stock value | |
| Trade Creditors Liabilities | 100 | Amount to be paid to stock supplier | |
| Landed cost expenses to stock - expense account | 25 | Expense account tracking landed costs in separate account | |
| Totals | 125 | 125 | Result = Stock increases $25 more than paid to stock supplier Landed cost expense account = Actual = $25 |
GL Control Accounts for Landed Costing
So two new control accounts have been added to Maintain GL Control
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