Accounts Payable (before tax) retention (15% retention example)
|
Description |
Amount |
|
Invoice |
1,000 |
|
Retention |
150 |
|
Subtotal |
850 |
|
Tax |
85 |
|
Invoice total payable |
935 |
Journals are as follows –
|
Description |
Dr |
CR |
|
Credit A/c - Trade Creditors |
|
935 |
|
Debit A/c - GST to collected |
85 |
|
|
Debit A/c – WIP |
850 |
|
|
Credit A/c - Retentions Payable |
|
150 |
|
Debit A/c - Deferred WIP/COS |
150 |
|
Now we go into the inquiry screen as you discussed and we RELEASE which will create the invoice.
|
Description |
Dr |
Cr |
|
Credit A/c - Trade Creditors |
|
165 |
|
Debit A/c - Retentions Payable |
150 |
|
|
Debit A/c - GST to collected |
15 |
|
|
Credit A/c - Deferred WIP |
|
150 |
|
Debit A/c – WIP |
150 |
|
Retention to be held - Accounts Payable (after tax) retention (15% retention example)
|
Description |
Amount |
|
Invoice |
1,000 |
|
Tax |
100 |
|
Sub total |
1,100 |
|
Subtract retentions |
165 |
|
Invoice total payable |
935 |
Journals are as follows
|
Description |
Dr |
Cr |
|
Credit A/c - Trade Creditors |
|
935 |
|
Debit A/c - GST to collected |
100 |
|
|
Debit A/c - WIP/COS |
1,000 |
|
|
Credit A/c - Retentions Payable |
|
165 |
*NOTE NO DEFERRED ACCOUNT USED*
Now we go into the inquiry screen and we RELEASE which will create the invoice.
|
Description |
Dr |
Cr |
|
Credit A/c - Trade Creditors |
|
165 |
|
Debit A/c - Retentions to be Paid |
165 |
|