Issue with Item Charge and Drop Shipment

alsol

When we post an item charge and select purchase receipt lines that are posted as a drop shipment, there is a strange error message saying:

Applies-to Entry must have a value in Item Journal Line Journal Template Name =, Journal Batch Name=, Line No.=0. It cannot be zero or empty.

In theory I think it should work to post item charges for purchase receipts and then NAV automatically adjusts the COGS on the sales shipment that has been posted using the drop shipment logic. But here it looks like it is not working.

Does anyone have an idea here?