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#3
03-07-2005, 09:10 AM
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 Re: Inventory Casualty Thank you Paul.That is what I thought. Its hard for the client to understand this though. << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#2
03-07-2005, 07:53 AM
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| Re: Inventory Casualty techiegirl wrote: - quote - > My question is if purchases for inventory are deducted when
Correct; no double dipping.> actually bought,not when used, the inventory that had to be > thrown away can not be deducted again can it? It can not be > deducted once as Purchases and then again as a Casualty? - quote - > Here is some details: The way the cogs shows in quickbooks
That "wood" be correct. (Is this a wood working shop?)> is under a Purchaes account and the deduction is showing for > that year. So say they write a check for wood of $500, that > is what shows under COGS for the year of 2004. Doesn't > matter weather it was used or not. It is deducted in the > year purchased. - quote - > At the end of the year they give me a total of what
Unless the inventory on 12/31 is material, I woodn't even> inventory they have left. I put in a adjustment into the > Purchaes account and Inventory account to show correct > inventory at the end of the year on the Balance sheet. I now > believe this is wrong..not sure. I just followed what the > accountant before me had been doing. bother to adjust for inventory on a new business. However once started, I "wood" be consistent of course. ChEAr$, Harlan Lunsfod, EA n LA << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#1
03-03-2005, 11:53 PM
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| Re: Inventory Casualty "techiegirl" <techie[at]techiegirl.com> wrote: - quote - > My question is if purchases for inventory are deducted when
The prior accountant was correct, though it could be done> actually bought,not when used, the inventory that had to be > thrown away can not be deducted again can it? It can not be > deducted once as Purchases and then again as a Casualty? > Here is some details: The way the cogs shows in quickbooks > is under a Purchaes account and the deduction is showing for > that year. So say they write a check for wood of $500, that > is what shows under COGS for the year of 2004. Doesn't > matter weather it was used or not. It is deducted in the > year purchased. > At the end of the year they give me a total of what > inventory they have left. I put in a adjustment into the > Purchaes account and Inventory account to show correct > inventory at the end of the year on the Balance sheet. I now > believe this is wrong..not sure. I just followed what the > accountant before me had been doing. more clearly. You always adjust inventory and purchases for the amount in ending inventory. The way I do it is to create two COGS accounts: "Beginning Inventory CGS" and "Less Ending Inventory CGS." On January 1 I put in a journal entry debiting the first account and crediting the second one for the prior year ending inventory. On December 31 the adjustment to get the Inventory Asset correct goes to the "Less" account. Purchases are only deducted to the extent they are used. -- Tom Healy, CPA Boulder, CO Web: http://www.tomhealycpa.com << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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03-03-2005, 10:56 PM
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| Re: Inventory Casualty "techiegirl" <techie[at]techiegirl.com> wrote - quote - > My question is if purchases for inventory are deducted when
You can only get one deduction for the expense.> actually bought,not when used, the inventory that had to be > thrown away can not be deducted again can it? - quote - > It can not be deducted once as Purchases and then again
No.> as a Casualty? -- Paul A. Thomas, CPA Athens, Georgia taxman at negia.net << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#-1
03-03-2005, 07:09 AM
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| Inventory Casualty My question is if purchases for inventory are deducted when actually bought,not when used, the inventory that had to be thrown away can not be deducted again can it? It can not be deducted once as Purchases and then again as a Casualty? Here is some details: The way the cogs shows in quickbooks is under a Purchaes account and the deduction is showing for that year. So say they write a check for wood of $500, that is what shows under COGS for the year of 2004. Doesn't matter weather it was used or not. It is deducted in the year purchased. At the end of the year they give me a total of what inventory they have left. I put in a adjustment into the Purchaes account and Inventory account to show correct inventory at the end of the year on the Balance sheet. I now believe this is wrong..not sure. I just followed what the accountant before me had been doing. Thank you for any help. << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
| Tags |
| casualty, inventory |
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