Case Study.... Help!!!
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sarahuk3
Registered Posts: 31 Regular contributor ⭐
Hi Everyone,
Just a quick question about posting journals in the main ledger for the acquisition of a new car.
this is what i have that i am working on:
Invoice: Hylex Motors
VX04 TMS 10,900.00
VAT 1,907.50
12,807.50
Excise Duty (12months) 165.00
12,972.50
less p/e -1,850.00
11,122.50
the company is not able to recover input vat on the purchase of a new car, so when i am posting in the main ledger am i using the net value of 10,900?
Thank you!!
Sx
Just a quick question about posting journals in the main ledger for the acquisition of a new car.
this is what i have that i am working on:
Invoice: Hylex Motors
VX04 TMS 10,900.00
VAT 1,907.50
12,807.50
Excise Duty (12months) 165.00
12,972.50
less p/e -1,850.00
11,122.50
the company is not able to recover input vat on the purchase of a new car, so when i am posting in the main ledger am i using the net value of 10,900?
Thank you!!
Sx
0
Comments
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As you rightly say VAT is not recoverable on the purchase of cars. Thus, the cost of the car to the business is the *gross* amount and it is this that needs to be entered in the ledger. If the vehicles was, say, a van, the cost would be the net value and the VAT would be separated off with a corresponding double entry in the VAT account.
I've an example here which might be of some use.0
