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Inventory Cost Method or Lower Cost Method

Which method of reporting can you use if you drop shipped merchandise but also bought inventory items in bulk? I recorded the amount I paid for drop shipped items as well as the inventory purchased in bulk.
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Accepted Solutions
Fern
New Member

Inventory Cost Method or Lower Cost Method

If you recorded the actual amount you paid for both items that were drop shipped and items purchased in bulk, you used the cost method to record your inventory.

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3 Replies
Fern
New Member

Inventory Cost Method or Lower Cost Method

If you recorded the actual amount you paid for both items that were drop shipped and items purchased in bulk, you used the cost method to record your inventory.

Inventory Cost Method or Lower Cost Method

I recorded the amount I paid for drop shipped items ex: if the item was $25.00 I charged the customer $50.00 = $25.00 profit. For drop shipped items I have recorded the actual amount per item (ex: $5.00 per item x 100 = $500.00 total.) Would this qualify for the cost method?
Fern
New Member

Inventory Cost Method or Lower Cost Method

Yes.

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