You didn't specify, so I am going to assume that 2019 was your first year dealing with inventory. Understand that what you pay for inventory is not a deductible business expense until the tax year you actually sell that inventory. It just flat out does not matter if you purchased the inventory 50 years ago either.
In a year, I sold parts that I had in inventory for $2,160.
So with 2019 being your first year dealing with inventory, your BOY inventory balance ***MUST*** be zero. Period. End of story.
This is because your current tax year (which is 2019) BOY inventory balance *must* match exactly your prior tax year EOY inventory balance. There are no exceptions to this. Since your business did not exist in 2018, or your business did not carry/report inventory in 2018, that means your 2018 EOY balance was ZERO. Since your 2019 BOY inventory balance must match your 2018 EOY inventory balance, that means your 2019 BOY inventory balance *MUST* *BE* *ZERO*. It flat ot does not matter if you actually purchased that inventory many years ago either.
The parts withdrawn from inventory had a value of $1,450.
I assume by "withdrawn from inventory" that you mean you actually sold those parts to costomers. The "value" of those parts just flat out does not matter at thes specific and explicit point in time. What matters here is what *YOU* paid for those parts from the suppler, regardless of what year you purchased and paid for them.
The BOY inventory was $9,787
Does that match "exactly" the EOY inventory balance reported on your 2018 tax return? It absolutely positively must, with no exceptions.
and the EOY inventory was $1,062. $1,725 in purchase parts were added to the inventory.
Because of the clarification I need and have requested, I just can't work with your numbers at this time, until you either provide the correct numbers and confirm beyond any doubt that the numbers you have provided are in fact, being interpreted correctly by me.
The cost to ship the parts was $260.
I'm ignoring shipping costs at this time, because that's a physically separate expense that's handled and dealt with outside of COGS *UNLESS* it is included in the invoice you received from the supplier as "a part of" the cost of the part. If the latter, then it's just included in the cost of the part. I personally always separate shipping costs and claim it as a physically separate expense outside of COGS, because if I don't, it tends to become a paperwork nightmare in short time trying to do the math at tax time.
Hang in there and when you "Get it" that light that comes on over your heading will be blinding when you see the simplicity of this. 🙂
