ESzczesniak

That's what it should do.  A strong wind will "blow" the aircraft off course from where the nose is headed.  It's the same reason you need to crab on a cross wind landing, and the same thing you need to understand to know the difference between track and heading on a navigation plot.

Where are you getting this information?  There are multiple ways to insert latitude/longitude waypoints in the FMC, 5040N being one of the acceptable formats.
 
The problem you are having with N050W040 is the number of digits in you latitude.  Since there are only 90 degrees north and 90 degrees south of the equator, the degrees position has only 2 digits and is entered in to the FMC in the format NXXWYYY (so N50W040).  If additional accuracy is needed in minutes and seconds, the format is NDDMM.SWDDDMM.S (D = degrees, M = minutes, S = seconds in decimal format)