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Join nowMost 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.
Solved! Go to Solution.
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.
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.
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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