1120 accounting flow

Landing cost

Not prepaid

Cr. PO payable(PO value)

Automatically Offset

Dr. PO payable(PO value)

Pay to supplier(PO value)

Asset

Pay landing costs

Cr. PO payableDr. PO payable(PO value)

Dr. Inventory valueCr. Prepayment(PO value)

Dr. Inventory value(PO value)

Timeline

Accounting flow of purchasing

Dr. PrepaymentCr. Bank account(PO value)

Receive inventory

Prepaid

After received landing cost invoices (probably few weeks later)

Monthly adjustment

PO

Liability

Dr. PO payableCr. Accrued inventory burden(The amount left in Goods suspense: markup and variance between estimated landing cost and invoiced landing cost)

Prepay to supplier(PO value)

Cr. Bank Account(PO value)