INDIRECT TAXES - JOURNAL ENTRIES

Please find below the journal entries of buy/sell operation, and the respective Financial Statements.

Assumptions:
Brazilian company acquires goods of $ 100.000, and then resell it for $ 200.000. ICMS is taxed at 18% (buy and sell) and PIS/COFINS is 9.25% (buy and sell).

Buy Operation
D - Inventory - $ 72.250
D - ICMS recoverable - $ 18.000
D - PIS/COFINS recoverable - $ 9.250
C - Supplier payable - $ 100.000

Sell Operation
D - Cost of Products (P/L) - $ 72.250
C - Inventory - $ 72.250

D - Customer Receivable - 200.000
C - Gross Revenue (P/L) - 200.000

D - ICMS (P/L) - 36.000
D - PIS/COFINS (P/L) - 18.500
C - ICMS Payable - 36.000
C - PIS/COFINS Payable - 18.500

FINANCIAL STATEMENT

Gross Revenue $ 200.000

ICMS - (36.000)

PIS/COFINS - (18.500)

Net Revenue - 145.500

Cost of Product (72.250)

Gross Profit - 72.250