You will say that
ending inventory is zero and also enter Purchases Withdrawn for Personal Use.
The most basic
formula for account for inventory is:
- Beginning Inventory
(this should be the same as your ending inventory for 2014)
- Plus Cost of Purchases
- Minus Cost of Goods
Sold
- Equals Ending
Inventory (since you’re closing your business, this is zero at the end of 2015)
There are other
numbers in the middle one of which is Purchases Withdrawn for Personal Use. You
enter the amount of inventory withdrawn for personal use so that the amount you
kept for personal use isn’t included in your Cost of Goods Sold.
This is how you will enter the information for the inventory section:.
- After going through
the preliminary screens for inventory, you reach “Report the Value of Your
Inventory”
- Beginning of 2015 –
the same amount of your ending inventory for 2014
- End of 2015 – Zero
- On the following
screen, “Tell Us the Cost of Your Goods”
- You will enter
$12,500 at the Purchases Withdrawn for Personal Use
Make sure you also enter any other
data you have for this screen such as Cost of Purchases.
