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Level 1

In 2016 I bought raw materials for making a product. I didn't use it all it, so I am carrying the inventory into 2017. What QB report would tell me how much I spent?

Most of what I sell are handcrafted art objects, and I will be filing a Schedule C.  When I purchased raw materials, I assigned the cost to an Other Asset account, which I regard as my inventory.  Then, after having turned the material into a product I have sold, I periodically transferred some of the value of the raw materials into a Cost of Good Sold account, using a general journal entry.  Is that the right way to do it?

Before asking my main question, I want to explain my understanding of calculating COGS just to make sure I've got it right.

My understanding is that for calculating the COGS, I need to enter into Turbotax my purchases for 2016, my inventory at the beginning and my inventory at the  end of 2016.  Then COGS is calculated by subtracting the year-end inventory from the starting inventory and adding that to my purchases of raw materials (and also adding other expenses such as certain supplies and materials that go into making the product, and wages paid to workers).  But how do I track my purchases of raw materials for the year if I'm assigning them to the inventory account?

When I run a profit/loss standard report, the cost of goods sold is already calculated.  It doesn't tell me anything about how much I have spent on the purchases of raw materials that I had assigned to the asset account (and later moved to the COGS account).

So my question is what's the best way to go about finding the amount spent on purchases that went into inventory?  I suppose I could take the COGS figure from the profit/loss statement and add to it my year-end inventory and then subtract the starting inventory.  But there must be some other report I could run to give me the figure directly.  Thanks in advance for any advice.





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Best answer December 10, 2018

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Level 15

In 2016 I bought raw materials for making a product. I didn't use it all it, so I am carrying the inventory into 2017. What QB report would tell me how much I spent?

For reporting only, in search in the reports section enter purchases, you can select by item or by vendor

Tax reporting and QB accounting (or any accounting package for that matter) are often at odds with each other.

If you keep inventory, for the fiscal year 2016
balance sheet date 12/31/2015  for starting inventory value (inventory asset account)
balance sheet date 12/31/2016  for ending inventory value (inventory asset account) (this report needs to be run on 1/1/2017 to insure all transactions for 12/31 are included)

Purchase report by item for 2016, but filtered for only inventory type items.


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Highlighted
Level 15

In 2016 I bought raw materials for making a product. I didn't use it all it, so I am carrying the inventory into 2017. What QB report would tell me how much I spent?

For reporting only, in search in the reports section enter purchases, you can select by item or by vendor

Tax reporting and QB accounting (or any accounting package for that matter) are often at odds with each other.

If you keep inventory, for the fiscal year 2016
balance sheet date 12/31/2015  for starting inventory value (inventory asset account)
balance sheet date 12/31/2016  for ending inventory value (inventory asset account) (this report needs to be run on 1/1/2017 to insure all transactions for 12/31 are included)

Purchase report by item for 2016, but filtered for only inventory type items.


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Level 1

In 2016 I bought raw materials for making a product. I didn't use it all it, so I am carrying the inventory into 2017. What QB report would tell me how much I spent?

Thank you for this suggestion.  Because I didn't enter the raw materials as an item, I couldn't search that way.  There are multiple vendors, so I was looking for a simple way to get the tally to show up in one report.

I think I've figured out a solution by using class tracking.  I made up a class called Purchase of Stock, and I've gone through all of the raw material purchases for the year and on each one I clicked on Class and selected Purchase of Stock.  Now I can run a report with the filters All vendors, All Accounts, but only for the Purchase of Stock Class, and, voila!  I've clicked on the  "Memorize..." button so that next year this task should be a whole lot easier.
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Community Champion

In 2016 I bought raw materials for making a product. I didn't use it all it, so I am carrying the inventory into 2017. What QB report would tell me how much I spent?

You have most of the concept of COGS but maybe not exact timeline. Look at page 2 of Schedule C. Take beginning inventory, add purchases for year plus labor related to production, materials suplies and other costs and finally subtract ending inventory.

All your purchases that might some day be turned into art are added in the calculation, whether or not they were posted as inventory. You will pull your ending inventory from your balance sheet after you physically count and adjust. Physically count? Yes, yes, yes.
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Level 1

In 2016 I bought raw materials for making a product. I didn't use it all it, so I am carrying the inventory into 2017. What QB report would tell me how much I spent?

Thank you for the reply.  I understood what you wrote, but it doesn't really answer the question I have, which I think is because I didn't state it very well.

It's clear to me how COGS is calculated.  Whether the year-end inventory (yes, physically counted, counted, counted!) is subtracted at the end of the equation or at the beginning or in the middle shouldn't make a difference. (Addition is commutative.)  Maybe my problem is that Quickbooks does the behind-the-scenes calculations of COGS for me and tells in the report what the Total COGS value is, whereas Turbotax asks me to fill in my purchase amount.  This year that would be easy enough for me to figure out since I've got just a few vendors and can tally up my entries into raw materials, but rather than listing my purchases and tallying outside of Quickbooks, I'd like to be able to make a report and see the amount. But I can't seem to figure out how to do that!
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Level 4

In 2016 I bought raw materials for making a product. I didn't use it all it, so I am carrying the inventory into 2017. What QB report would tell me how much I spent?

Hi there,   

Have you tried looking into your chart of accounts to get an understanding of your raw material expenses? On the QuickBooks Dashboard, select “Reports” and select “Inventory Valuation Detail” and see if you can find your costs in there :smileyvery-happy: 

Alternatively, have you investigated the QuickBooks app store for a solution to tracking your raw material costs? There’s some app on there, like Katana, that has been specifically built for manufacturers helping them with inventory management (finished goods and raw material), SO & MO fulfillment, and scheduling production.   

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