BOY Inventory balance - What *you* paid for the inventory in your physical possession on Jan 1 of the tax year. It does not matter what year you paid for it either. If this is your first year of dealing with inventory, then this balance "must" be $0. If this is not your first year then the balance must match exactly your prior year's EOY inventory balance.
EOY Inventory balance - What *you* paid for the inventory in your physical possession on Dec 31 of the tax year. It does not matter in what year you paid for it either.
Cost of Goods Sold (COGS) - What "you" paid for the inventory you actually sold during the tax year. In what year you paid for it does not matter.
Example:
BOY Inventory balance $5000
EOY Inventory balance $9000
COGS - $10,000
The above indicates that you started the tax year with $5000 of inventory in your physical possession on Jan 1. During the year you purchased an additional $14,000 of inventory bringing the total to $19,000 for the tax year. During that same year you sold $10,000 worth of inventory leaving you with an EOY balance of $9000.
