I have a Bath & Body Care company that makes soaps, lotions
etc. I have to CARRY an INVENTORY of all my oils, butters, packagings,
labels etc in order to run my business. This can be quite expensive so I
need to show this expense when purchased for the year even if it wasn't used to make a sold product
yet.
1. What is COST OF PURCHASES mean vs. MATERIAL & SUPPLIES on the Cost of your goods section?
2. Where do I enter material & supplies purchased for the year regardless if it was used in a product and sold?
3. Do I show the value used to make the product I sold on the MATERIALS & SUPPLIES line? But if so where does the unused get entered (?2)?
4. Inventory value is an asset (+value) don’t I have to show how
my inventory increased? If so where does
the unsold material & supplies that I purchased for the year get imputed as
an expense?
5. The line that says: OTHER COSTS TO PREPARE FOR SALES is this where the postage etc gets entered regarding the sale to ship it to the customer?
I was going to enter all postage expenses under OTHER BUSINESS EXPENSE but I am now curious if the postage for SOLD items should be
entered under the Cost of your goods section?
Thanks so much for your time!
