How to record landing cost in QuickBooks?
Software: QuickBooks Desktop
Advance payment is a payment made to the supplier before goods received. It debits the advance to the supplier account, which is an Other Current Asset and credits the accounts payable. It gets complicated when including the landing cost in the product average cost; often, the landing cost has excluded from the advances made.
Assuming the goods purchased is worth $100,000, and the landing cost is $4,000 (the shipping and insurance). You record the Bill as debits advance to the supplier and credits the accounts payable of $100,000 since no goods have received. Then, do a pay bill when due; the payment debits the accounts payable and credits the bank.
You can record the $4,000 landing cost via the Enter Bill or Write Cheque method depending on whether any bill received from the forwarder. It debits the landing cost expense and credits the accounts payable when using the Enter Bill, and credits the bank if write cheque method has applied instead.
A dummy bill has to record in QuickBooks to update the stock on hand when goods received. Select the product with the total cost of $104,000; this amount inclusive of the $4,000 landing cost. Then, deduce the $4,000 landing cost expense and the $100,000 advances paid. This dummy bill:
Debit the inventory assets account 104,000
Credit the landing cost 4,000
Credit advance to the supplier 100,000
There shouldn’t have any outstanding amount unless the advances difference from the billable amount.
The cost of sales will realise when there are sales of the product. It reduces the inventory cost and debits the cost of goods sold when an invoice has added to QuickBooks.
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