For simplicity in completing your tax return, you may ignore
inventory completely since your gross receipts were under $1 million. In this
case, simply report the purchase of inventory at cost as Materials or Supplies and answer that you had no inventory.
When you reach $1 million in gross sales, a bookkeeper can handle inventory for you.
See IRS Pub 334 Accounting
for Inventory under "Qualifying Taxpayer"
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