Hi Carl! I have read your explanations over and over again, and I'm one of those right-brained people who can't get my head around things. :(
Here's my scenario: I've been hobby selling online for the past few years. This year, I'm tracking my purchases and sales so I can accurately report and pay taxes on any profits I make. Over the past few years, I've acquired hundreds of widgets at about $5.00 each. Then last year, I purposely purchased more widgets because I planned on selling them and hopefully making a profit in 2025.
Since BOY inventory must be zero, how do I properly account for the things I bought prior to 2025? I have a ledger and have been recording what I paid, what it sold for, online fees and shipping costs for each item, but I JUST don't understand how inventory works on previous purchases. Do I have to manually unpack and count the thousands of things that I have in my stockroom and include them in my EOY inventory? I'm not getting the relationship between inventory I buy in 2025 vs. inventory I purchased in previous years.
Thanks in advance!
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