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AHJS's avatar
AHJS
Experienced Cover User
7 months ago

Supplier replacing faulty stock at no charge

Hi community   After some help please on how to handle an issue.   We purchase stock from our main supplier in Italy and have recently received a bad batch and all units are unsalable, the total ...
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  • Mike_James's avatar
    Mike_James
    7 months ago

    Hi AHJS , assuming you will pay the suppliers original bill, then you will end up with 1440 units for the price of 1608 units, ignoring any minor charges in NZ to bring the air shipment to your warehouse. So you could make an inventory adjustment to reduce the onhand quantity by 168 units but leave the cost unchanged, ie set the cost on the IJ to zero. The unit cost of the 1440 will increase. 

     

    There might be other ways to account for this depending on what you want to achieve. 

     

    I've also ignored the disposal or return costs for the faulty units, if applicable.

Mike_James's avatar
Mike_James
Ultimate Cover User
7 months ago

Hi AHJS , assuming you will pay the suppliers original bill, then you will end up with 1440 units for the price of 1608 units, ignoring any minor charges in NZ to bring the air shipment to your warehouse. So you could make an inventory adjustment to reduce the onhand quantity by 168 units but leave the cost unchanged, ie set the cost on the IJ to zero. The unit cost of the 1440 will increase. 

 

There might be other ways to account for this depending on what you want to achieve. 

 

I've also ignored the disposal or return costs for the faulty units, if applicable.

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