cost of inventory

[Silvergriffon]

I started my craft business beginning of 2018. I bought through out the year 857 worth of craft supplies. I used none of it to make my craft items i sold in 2018. I wound up using supplies i bought several years ago I had lying around. So what do i put in that section that want to know cost of purchase. Do I put zero since i didnt use any of the supplies i bought.

[IsabellaG · Accepted solution]

The supplies you had lying around would be considered part of your cost of goods sold for the year.  You should come up with a value of all of these items that you had on hand at the start of your business, based on the information you have available. Add that amount to the amount for your purchases in 2018. Then enter the value of your inventory at the end of the year. The difference will be the cost of goods sold for the items that you made and sold in 2018. 

[Silvergriffon]

So let me see if i got this correct

starting inventory $100 plus (purchases through out the year) $857 minus whats left at the end of the year $400

100 +857-400=557 cost of goods sold

I guess I am getting caught up on wording some stuff stays cost of goods sold and some stuff says cost of purchases. So are the the same thing or no.