How to make account of consumption tax payable for outsourced processing materials
For taxable consumer goods processed on a commission basis, if they are used for further processing, the consumption tax should be included in the tax payable. How do you account for the consumption tax payable on the outsourced processing materials? How to make accounting entries?
Account processing of consumption tax payable for outsourced processing materials
1. The entrusted processing materials are recovered for the continuous production of taxable consumer goods, and the accounting entries are as follows:
Debit: outsourced processing materials
Tax payable - VAT payable (input tax)
Tax payable - consumption tax payable
Credit: bank deposit
2. When the taxable consumer goods of subcontracting are recovered for direct sales, the accounting entries are as follows:
Debit: OEM materials
Tax payable - VAT payable (input tax)
Credit: bank deposit
Knowledge expansion: the key and difficult point of primary accounting practice of entrusted processing materials
Accounting treatment of consumption tax involved in deemed sales
Debit: main business taxes and surcharges
Credit: tax payable - consumption tax payable
The details are as follows:
Consumption tax payable by enterprises calculated according to regulations:
Debit: "long-term equity investment", "fixed assets"
"Administrative expenses", "welfare payable"
"Wages payable", "Operating expenses"
"Construction in progress", "Non operating expenditure" and other subjects.
Credit: "Tax payable - consumption tax payable
What does the subcontracting material mean? Which account does it belong to?
Answer: The entrusted processing materials refer to the materials that the enterprise entrusts other companies to process into new materials or packaging materials, low value consumables and other materials.
Subcontracting materials belong to the asset category. Its costs mainly include taxes paid, costs of materials actually consumed in processing, taxes paid, and freight and miscellaneous charges that should be borne.
Collection scope of consumption tax
The scope of consumption tax collection mainly includes tobacco, firecrackers, wine, refined oil, precious jewelry, cosmetics, golf and golf equipment, yachts, solid wood floors, cars, motorcycles, batteries, etc.