During the Dragon Boat Festival, companies will buy rice dumplings to distribute to employees or customers. So what are the accounting treatments involved in these purchased rice dumplings? According to relevant regulations, when an unit gives away the purchased goods to other units or individuals for free, it should be regarded as a sale of goods. Let’s learn about it together!
The accounting treatment of company distribution of rice dumplings during the Dragon Boat Festival
According to relevant regulations, units or individual industrial and commercial households will give away self-produced, entrusted processing or purchased goods for free. Other units or individuals should be regarded as selling goods, so the rice dumplings purchased from outside and given to customers should be treated as sales for VAT purposes.
The accounting entries for purchasing rice dumplings and distributing them to employees are as follows:
1. When purchasing:
Borrow: Inventory goods
Taxes payable—VAT payable (input tax)
Credit: bank deposits
2. Decided to purchase rice dumplings and distribute them to employees as a welfare:
< p>Debit: administrative expenses, production costs, manufacturing expenses, sales expenses, etc.Credit: employee compensation payable—non-monetary benefits
3. Actual payment to employees:
Debit: Employee benefits payable—non-monetary benefits
Credit: Inventory goods
Taxes payable—VAT payable (input tax transferred out)
Accounting treatment for sending rice dumplings to customers during the Dragon Boat Festival
When purchasing rice dumplings:
Borrow: Inventory goods
Borrow: Taxes payable - payable Pay value-added tax (input tax)
Debit: bank deposit
When giving a gift to a customer, make the following entries:
Debit: sales expenses—business promotion expenses /Administrative expenses—business entertainment expenses
Credit: Inventory goods
Taxes payable—VAT payable (output tax)
Distributing rice dumplings during the Dragon Boat Festival Tax-related treatment
1. As a welfare fee, the corresponding input tax is not deductible.
If the company uses self-produced rice dumplings for employee benefits, it can be treated as sales; if the company uses purchased rice dumplings for employee benefits, then the input tax for this part of the VAT needs to be Perform transfer-out processing; if the rice dumplings distributed by the company to employees are personal benefits, personal income tax should be withheld.
2. According to relevant regulations, the employee welfare expenses incurred by the enterprise shall be deducted for the part not exceeding 14% of the total wages and salaries.