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Should I calculate inventory value based on the price I paid for the item wholesale or the price that is currently available to purchase at wholesale (its lower now)?

Forum|Forum|6 years ago
February 26, 2020
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TurboTax Live Self Employed

Best answer by VictorW9

Your purchases should be the actual cost you paid for the inventory not the current available price. However, the value of closing inventory should be the lower of cost or net realizable value.

Calculating your Cost of Goods Sold (COGS):

Opening Inventory XXXXX

+ Purchases XXXXX

Goods Available for Sale XXXXX

- Closing Inventory XXXXX

Cost of Goods Sold XXXXX

Your purchases should be the actual cost you paid for the inventory not the current available price. However, the value of closing inventory should be the lower of cost or net realizable value.

Calculating your Cost of Goods Sold (COGS):

Opening Inventory XXXXX

+ Purchases XXXXX

Goods Available for Sale XXXXX

- Closing Inventory XXXXX

Cost of Goods Sold XXXXX

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