cancel
Showing results for 
Search instead for 
Did you mean: 
erinfs
Level 1

How to adjust inventory value for loss due to discounted sales

I closed my retail business last year and had a huge sale to reduce the remaining inventory. All items were sold at one price, regardless of the original price. The sale was chaotic, and I was unable to enter transactions for the specific individual items sold; however, I do have a list of what was left after the sale, so I know what the ending value needs to be. How can I adjust the value of the inventory - while also addressing the loss due to the deeply discounted sale price?

 

For example, an item that cost me $120 and originally sold for $275 was sold at the final sale for $45. 

 

I have already entered the income from the sale on the check register, but still need to adjust the inventory value and account for the loss.

 

Thank you!

3 Comments 3
DebSheenD
QuickBooks Team

How to adjust inventory value for loss due to discounted sales

I know a way how to adjust inventory value for loss due to discounted sales, erinfs.

 

You can adjust your inventory by using the Opening Balance Equity as the posting account. This way, it will not show on the Profit and Loss Report.


To begin, create the account so you can use it when adjusting the inventory parts. Here’s how:

 

  1. Navigate to the List menu to open the Chart of Accounts.
  2. When the page opens, right-click your mouse anywhere and choose New.
  3. In the Account window, mark the radio button for Equity and then hit the Continue button to proceed.


Let me know if you have further questions or any other concerns. I’m always ready to help. Have a good one.

 

  1. At the top bar, go to the Inventory menu to select the Adjust Quantity/Value on Hand.
  2. Another window will open, type in the Adjustment Date and enter Opening Balance Equity as the Adjustment Account.
  3. You can also type in additional details such as reference number, Customer/Job, or Class.
  4. Then, choose the product you’re adjusting to and add it in QuickBooks. For the step-by-step procedure, click here and proceed directly to Step 2 until Step 3.

 

I’m also adding articles with links to help get started with QuickBooks Desktop.

 


Let me know if you have further questions or any other concerns. I’m always ready to help. Have a good one.

erinfs
Level 1

How to adjust inventory value for loss due to discounted sales

Thank you so much, but I'd like to adjust the value, not the quantity, as there were hundreds of items sold in this sale. If I wanted to do that much work, I'd just create an invoice. Also, to be clear, this was for a business that I closed, so I don't know that using Opening Balance Equity is the right approach.

Rainflurry
Level 13

How to adjust inventory value for loss due to discounted sales

@erinfs 

 

You want to do a journal entry to reduce inventory with a corresponding increase in cost of goods sold (COGS).  To do that, create a journal entry by debiting COGS and crediting inventory.  Up until the point where things got chaotic, were you tracking the COGS of items that sold?  If so, I would use the inventory number at that point and subtract your ending inventory to get your COGS debit/inventory credit.  If not, post more info and I can try to help further.   

 

The only "loss" you have is the difference between what you sold an item for and what you paid for it (COGS).  In your example, an item that cost you $120 and sells for $45 will result in a loss of $75 ($120-$45).  The $275 original price is irrelevant.

Need to get in touch?

Contact us