How to enter material and supplies that are not kept track of?

Forum|Forum|2 years ago
April 12, 2023
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I have a small business using the Cash basis of accounting. I do not keep track of my inventory, rather just buy it in bulk and use for many jobs until I need to purchase more. How would I enter what shows up as "cost of goods" in my P&L? I would put it in Other Common Business Expenses> Supplies, but the purchases can equal thousands of material to make my final product (rain gutters). The Inventory/Cost of Goods Sold category says to use it only if you keep track of inventory.

Windows TT Home & Biz

TurboTax Home & Biz Windows

Best answer by MinhT1

You do not need to keep track of your inventory for each job. To calculate Cost of Goods Sold, you enter your materials as Purchases.

You need to count and value your inventory at cost at the beginning of the year and again at the end of the year.

The formula for Cost of Goods Sold (COGS) is:

Beginning Inventory + Purchases - Ending Inventory

MinhT1Answer

You do not need to keep track of your inventory for each job. To calculate Cost of Goods Sold, you enter your materials as Purchases.

You need to count and value your inventory at cost at the beginning of the year and again at the end of the year.

The formula for Cost of Goods Sold (COGS) is:

Beginning Inventory + Purchases - Ending Inventory

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BpexAuthor

Can I just say I have $0 worth to start with and $0 to end with even though I still have some? Then just input the total cost of goods each year somewhere? It would be near impossible to calculate the cost of inventory I have left.

DawnC

Employee

Yes, you can enter $0 for beginning and ending inventory - and then you can use the Materials and Supplies line to enter your COGS expense. Keep detailed records of your materials and supplies purchases.

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