topic Inventory Valuation vs COGS in Business & farm

Inventory Valuation vs COGS

rachaelmw72 — Mon, 24 Feb 2020 02:29:45 GMT

I've been tracking my inventory costs with the intention of using the accrual method (COGS) rather than cash method.

At what point do I enter that number when filling out self employment expenses?

I'm assuming that when it asks for BOY inventory and EOY inventory, I type in what I currently have on hand at those points in time (my BOY was 0 and my EOY was $8887).

Do I put in COGS ($1263) when it asks for Cost of Inventory? Or is that supposed to be my $8887?

I know my COGS is a relevant number... Just don't know where to put it. Help!

Re: Inventory Valuation vs COGS

KarenM90 — Mon, 24 Feb 2020 03:08:18 GMT

Yes, be sure to enter the Cost of Inventory for BOY and EOY, you don't need to enter COGS.

TurboTax will the information you entered, along with your Inventory Purchases for the year to determine your Cost of Goods Sold.

The Calculation is:

Beginning Inventory + Purchases (and other direct costs ... labor, etc) - Ending Inventory = COGS

So you won't need to enter COGS, it will be calculated based on your answers related to purchases and other direct costs.

Re: Inventory Valuation vs COGS

rachaelmw72 — Mon, 24 Feb 2020 03:11:21 GMT

@KarenM90 wrote:
Yes, be sure to enter the Cost of Inventory for BOY and EOY, you don't need to enter COGS.

TurboTax will the information you entered, along with your Inventory Purchases for the year to determine your Cost of Goods Sold.

The Calculation is:

Beginning Inventory + Purchases (and other direct costs ... labor, etc) - Ending Inventory = COGS

So you won't need to enter COGS, it will be calculated based on your answers related to purchases and other direct costs.

Thank you! So when it asks for Purchases Etc, that's where I would enter the TOTAL amount I spent for inventory that year?

So if I started with $0, purchased $10k, sold $2k of that, and have $8k left in inventory, the $10k would go in that spot that says Cost of Purchases?

Re: Inventory Valuation vs COGS

ColeenD3 — Mon, 24 Feb 2020 20:03:50 GMT

You are correct. That is how it should be entered.