Hi
I Return a machine and traded it in for a cheaper machine the difference was added in a credit and i had to pay VAT for that. since the tax office conciders it a s profit.
Now because of that VAT my journal post does not add up completely the credit is 302.15 inc 52.44 VAT
While the difference is 249.71.
Is there another way to do this ?
The way to handle this depends on circumstances you have not explained. Was the first machine purchased just recently and turned out to be the wrong one? So was it being exchanged for the right model? If so, a debit note is more likely the right way to enter the transaction.
Was it purchased years ago? Is it a fixed asset? Has it been depreciated? Is it being “traded in” on the new machine? If this is the situation, you should probably be disposing of a fixed asset and purchasing a new one.
Regardless of the situation, a journal entry is very unlikely to be the right way to enter the transaction.
The first machine was purchaged in 2015 and was deprecitated for about 1 fifth of the value.
the second machine was a cheaper one.
On the invoice it says return total value of old machine 1,578.38 EUR
than i bought some items with a total of 444,17 EUR and the new machine 884,50 EUR all ex VAT there is an ammount left and deposited in a shop credit it is 249.71 EUR but because this is profit i have to pay 21 % tax and i don’t know how to handle this. it makes the total 302.15 EUR
So 444.17 + 884.50 + 302.15 = 1,630.82 EUR
and the return is 1,578.38 EUR
I believe the important thing is not to try to force this to be a single transaction in Manager, even though everything may be documented on one piece of paper from the supplier. In reality, several things have happened. Here are several thoughts, not necessarily in any order.
The old machine is a disposed fixed asset. You have, in effect, sold it back to the supplier. Because there is undepreciated value remaining, enter a receipt or sales invoice for the amount the supplier allowed on the old machine. Post the transaction to Fixed assets. Then follow this Guide: Dispose of fixed assets | Manager to dispose of the asset.
Enter the new fixed asset at its purchase price. Use a purchase invoice for this. Also post to Fixed assets. The other items can be on the same purchase invoice, posted to their appropriate accounts.
I don’t know your tax law, so I don’t know whether you are required to collect VAT from the supplier for the old machine you are selling back to him. If so, select the right tax code for the receipt. Thus, VAT on purchase and sale would offset, although the time separation is two years.
Or, your tax law may allow you to simply offset the trade-in value of the old machine, effectively reducing the price of the new machine. If so, change its price on the purchase invoice to reflect the trade-in.
If I understand what you have described correctly, I don’t see why there is a credit. According to my understanding, you paid more for the new machine than the allowance for the old machine.
I also don’t see why you want to include tax on any profit in this transaction. Whether you made or lost money selling the old machine back, the amount will show up in Fixed assets - loss on disposal. You will pay income tax on that profit as part of your regular income tax filing, not as part of this transaction.
I am sorry this all sounds so confusing. You probably need to consult a local tax expert before figuring out exactly how to enter everything.
You don’t pay the tax (21%) on the credit note balance as its not profit, it is just unspent refund which you will spend at a later date.
You don’t say if the old machine 1578.38 is nett or gross, but lets assume nett.
Separate to this, you need to go to the Fixed Assets tab to complete the disposal of the old machine, and if there is a profit that will get transferred to the P&L.
