This does not explain how to report lost inventory. Such as by theft or damage.
Is this just calculated as a loss when you report your EOY inventory amount? Can you report this loss as an expense as well?
Example;
BOY Inventory $10,000
Purchases $2,000
Gives $12,000 Inventory.
I sold $8,000 but at end of year my inventory was $3000.
I therefore lost $1000 worth of inventory.
Will this just show as a COGS as $9,000? ($10,000 + $2,000 - $3,000)
I assume my profit would therefore be $1,000.
If this is correct, I would not be able to deduct the losses as a business expense also.
