Question

Inventory Cost Adjustment

Forum|Forum|5 years ago
April 20, 2021
2 replies
3 views

A twist on the previous questions asked on this subject.

- A client purchases an item in 2019 for resale, adds to inventory at that time.

- 2021, client is demoing the item to a prospective client and finds out the item is not working properly.

- Client sends the inventory item in for repair and receives a substantial invoice for the repair.

I need to add this repair cost to the inventory cost of the item already in stock.

For obvious reasons I can't simply go back and adjust the original invoice due to the time lag.

For timing reasons I can't just DR Cost of Sales since the item has not sold.

Any thoughts on updating the cost of an existing inventory item to properly reflect the COGS when the item does sell?

L

LauraAB

Level 8

Hello RogerLeclair,

Posting to the QuickBooks Community is a great way to brainstorm with other users about the different ways you can record transactions. It sounds to me like you know your stuff about working with accounting, but it never hurts to double check the best way to record something in QuickBooks Online.

As a technical support member of the QuickBooks Team, I'm not able to offer you accounting advice on how to handle this situation with your client's inventory, but you may receive responses from others here in the QuickBooks Community forum. There are many great minds reading through, so keep an eye out for responses from them to see if any of their recommendations work for you. If you're looking for a more immediate response, I recommend consulting any accounting colleagues to see what their thoughts are on the steps you could take to handle this.

I wish you the best!

R

RogerLeclairAuthor

Hey Laura, thanks for taking the time to post a response.

I think you may have misunderstood the question, maybe I wasn’t clear? I’m not looking for accounting advice, I know I need to increase the cost base of the inventory item. I am simply unclear how one goes about doing that in QB.

Numerous questions have been posed concerning the addition of duties and tariffs that they need to add to the cost of purchased inventory. Since these charges are typically received in a timely manner after the receipt of goods it makes sense to adjust the original inventory purchase entry. Mine however falls in different years so the original entry can’t be modified. That’s the crux of the situation.

L

LauraAB

Level 8

I appreciate the follow up. With the details you've given so far, the situation may require some accounting tricks through journal entries or otherwise to make things work out the way they need to in the books. You could try simply editing the inventory item through the Products and Services section of the Sales tab and changing the cost value to see how that impacts the books, but that may or may not be the best way to handle it.

If you'd like to test various things, feel free to test out how you have things set up in the QuickBooks Online Test Drive account to see the impact of the changes you're making and if it works out the way you need it to.

I hope this helps.

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