Skip to main content

Get 50% OFF QuickBooks for 3 months*

Buy now
Switch to QuickBooks and 70% off for 3 Months
Talk to Sales: 877-683-3280
Hours
Mon - Fri, 5am - 6pm PST
Sat - Sun, 7am - 4pm PST
Product support & help
Need help signing in?
B
billhdz
January 3, 2023
Solved

Inventory Adjustment Question

  • January 3, 2023
  • 1 reply
  • 7 views

Happy New Year!!!

 

Last year in July I ordered 50 posters to sell.  The order was printed wrong with defects.  I was not charged for them.  Instead, the company just sent me a new batch of 50 posters corrected and printed well.

 

Before I got the good replacement posters order in, I had a client that needed to get some posters for an event he was doing, and did not mind that they were defective,  so I sold him some to get him out of a bind.  I didn't want to do this, but I also wanted to help him since he couldn't wait until the good order came in.

 

I never entered the bad posters into inventory because I am going to trash them and I did not get charged for them.  They just sent me new ones later.

 

Now I have an inventory issue, because it shows that I sold more than the amount entered into inventory.  I am off by 9 posters that client purchased when he purchased the bad posters from me.

 

Questions:

1. Do I enter the bad posters into inventory to fix this as a zero charge order?  

and if YES, how do I make the rest ( 41 quantity )  bad one as damaged inventory to take them out of inventory ( except for the 9 bad ones that the client purchased ).

 

2. OR, do I just make an inventory adjustment to add the posters needed to fix my inventory count and not enter the bad batch of posters?

 

Thank you for your time!

Bill

Best answer by Rainflurry

@Rainflurry , thank you!

 

When you say "If you want to put those 25 posters into inventory, you can enter a bill for 25 more at $0.00.", 

This bill I am entering,  is that another sales bill from the vendor of the posters?  ( Like the way I am entering the  vendor bill for the 9 posters @ $0.00/ea and dating it prior to 12-9 so that I can complete the invoice of 15 posters to and receive the payment. )?  

 I just enter another different bill that same way?  Is that correct?

 

Thanks again!

 


@billhdz 

 

You got it.  Just enter another bill for 25 items of that particular poster at $0.00 each and QB will put 25 more into inventory and the bill (since it was entered at $0.00) will show as paid.  I would date the bill as of the day you decided to put them into inventory.

1 reply

Rainflurry
Rainflurry
Level 11
January 3, 2023

@billhdz 

 

Presumably, your QB inventory shows 9 fewer posters than you have on-hand, correct?  If that's the case, I think the best solution is to create a bill from your vendor for 9 posters at $0.00/each.  That will put 9 posters into inventory and will recalculate your average cost to include the 9 posters you received free of charge.  

 

 

B
billhdzAuthor
January 4, 2023

@Rainflurry 

Thanks for the reply.

 

1. If I do it this way, will any of the invoices I already created from poster sales get messed up?

How does Quickbooks handle those entered from the created bill from my vendor for posters at $0.00/each?

 

2. When Quickbooks recalculates the average cost to include the 9 posters when they are entered at $0.00/each, what does that do to the invoices or sales numbers?

 

3. Will doing an inventory adjustment instead something to consider?

 

Thanks!

 

 

 

Rainflurry
Rainflurry
Level 11
January 4, 2023

@billhdz 

 

If I do it this way, will any of the invoices I already created from poster sales get messed up?  How does Quickbooks handle those entered from the created bill from my vendor for posters at $0.00/each?

 

Those are great questions.  Did the sale of the 9 defective posters happen in 2022?  The previously-issued invoices are most likely already incorrect from a COGS perspective.  When you sold the 9 posters, QB created a COGS entry for those 9 posters and used your historical average cost to do so.  If the inventory went negative when you issued the invoice for the 9 defective posters, QB used the historical average cost of that item for the COGS expense.  But, we know that's incorrect since those last 9 posters were free of charge and you had not received them into inventory prior to issuing the invoice.  If, in fact, the inventory went to -9 when you issued the invoice, I think the proper way to fix this is to enter a bill for 9 posters at $0.00/each and date it prior to the invoice issued for the defective posters.  I failed to mention the date in my previous post.

 

Let me know if I'm not understanding the sequence correctly.  There may be others that understand QB inventory better than me, but that's my understanding.    

Need QuickBooks guidance?
Log in to access expert advice and community support instantly.
Terms & ConditionsAccessibility statement