Negative Inventory on an item with $0.00 Average Cost - Implications
Scenario #1 - I am aware of the problems of showing Negative Inventory in quickbooks. However, does it still create problems if that Negative inventory is on items with a $0.00 average cost? Example: employee cleaning out 40 year old facility and finds aproximately100 widgets. Inventory item is created with $0.00 average cost. ($0 Average cost because there is no expense or records to be found.) Inventory is sold, and at the end of the year we show sales of 150 widgets sold. (Negative inventory of 50 showing.)
At the end of year inventory, is there any problem making an inventory adjustment to quantity on hand and zeroing out that negative inventory.
I realize all 150 units sold are showing as 100% profit, as they should, as there was no cost. My question is: am I creating problems or issues within quickbooks by doing this?