How do you balance a G/L account due to a bad Moving Average Price

[mdicorato1]

How do you correct the G/L account due to a bad MAP?

Due to either a bad GR and or IR a Moving Average Price changed on a material. To correct a bad MAP it requires that there be zero stock. We issue out all stock as a 201 which will post to the G/L with the bad MAP. Once the MAP is corrected we put the stock back into inventory using a 202 which will reverse from the G/L the value of the stock back into inventory with the correct MAP but leave a balance of the difference on the G/L

Example

A materials correct MAP is $1.00 per LB.

Due to bad GR/IR, bad PO price and/or CS pack the MAP increased to $10.00 per LB over a period of about 6 weeks.

During this period 20,000 LBS were received into inventory SLOC using a 101 posting

During this period 10,000 LBS material was issued to production using a 311 posting, over night a background job runs to clear the production SLOC using a 201 posting which hits the G/L account with the valuated cost at the time of the posting.

When the bad MAP was caught we have 10,000 LBS of stock with a MAP of $10 per LB with a total valuation of $100,000.00 . When you clear the stock the $100,000.00 will hit the G/L

Once the MAP is corrected the 10,000 LBS is put back into inventory with correct $1.00 per LB MAP with a total valuation of $10,000.00 leaving $90,00.00 sitting in the G/L account that isn't real.