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Robert M.
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Category: Financial Software
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Experience:  30 yrs. of computer experience in financial and marketing departments.
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I use QuickBooks Pro 2014. I am an artist. I *make* my inventory,

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I use QuickBooks Pro 2014. I am an artist. I *make* my inventory, but each piece is not unique, so I use the inventory list and assign "style" numbers to individual items. For this reason, my onhand inventory numbers are usually negative. Occasionally, I go through and "add" in inventory that has been purchased from my own company, to make those numbers go into positive.

A few years ago when I started my inventory list, I put in a "Cost" for each of my items that covered the cost of producing the item (materials and labor). At this time I had employees producing these items.

At tax time, I realized that I had previously filed taxes based on taking the full *materials cost* deduction rather than considering the "Cost of goods Sold". So I ignored that figure, and used the "Total Income" figure rather than the "Gross Profit" figure as my gross income figure on my tax returns. I took all the allowable tax deductions based on operations of my business, including 100% of the materials costs, so I am not worried about the tax return.

ok. here is my question....

I went through all my items, and made the "Cost" of each item "Zero". This has been a few years ago, but I still have "Cost of Goods Sold" amount showing up on the Profit and Loss reports.

Is this a problem?

Shouldn't the COGS amount be Zero if I am taking 100% of materials used as a deduction?

How do I adjust this?
Submitted: 1 year ago.
Category: Financial Software
Expert:  Robert M. replied 1 year ago.

Hi, I'm Robert and I'll be helping you with your financial software question.

 

Does the cogs show up for new items after you changed the cost "to your company" to zero ? or is it from old items before you changed your methods ?

Customer: replied 1 year ago.

For new items, I have always put in "Zero" for the cost. I think this is for items that are old...that the cost has been changed to "Zero", but I am still using.

Expert:  Robert M. replied 1 year ago.

Can you send me a screen shot of the report that you are having issues with please

 

Screen shot instructions

hold alt button down hit print screen button release buttons

click start menu / all programs / accesories / paint

click edit / paste

click file / save as

save as a jpg file in my pictures

 

on the top of this window click the insert button it should be a paper clip to right of the smiley face.

click browse.

click browse in the 2nd window that pops up

browse to the file you just saved in my pictures

click ok

click insert back in the first window

 

 

Customer: replied 1 year ago.

Requested QB report

Expert:  Robert M. replied 1 year ago.

will that report drill down ?

 

some of them if you double click on the COGS or the 297 it will open up and show you where that money is coming from.

Customer: replied 1 year ago.

Customer: replied 1 year ago.

Customer: replied 1 year ago.

Customer: replied 1 year ago.

Expert:  Robert M. replied 1 year ago.

pull up those invoices and look at them. There is probably something about them in common. They may all have sold one or two particular items that were not adjusted completely when you did the switch

 

look at a couple of them and then look at that particular item that was sold.

Customer: replied 1 year ago.

I have checked repeatedly these items. They are all under a single parent group. They all have a COGS as "zero". The amount listed on the report is coming from the "average cost" of the item.

Expert:  Robert M. replied 1 year ago.

ok. that means that you sold the item previously maybe years ago and it had a cost back then.

 

That is one of the deficiencies in quickbooks. It insists on using average cost for inventory items. Other programs can adjust to Lifo or Fifo.

 

Try the instructions on this page to manually adjust the cost for those items. And you might want to avoid the issue totally by giving them new item numbers.

 

http://support.quickbooks.intuit.com/support/pages/inproducthelp/Core/QB2K12/ContentPackage/Core/Inventory/task_inventory_adjust_value.html

 

Robert M., Consultant
Satisfied Customers: 7598
Experience: 30 yrs. of computer experience in financial and marketing departments.
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Expert:  Robert M. replied 1 year ago.
I was just following up on our work. Thank you very much for the rating. If you have further issues with this same problem you can post in the original problem and i will give you more help for free. If you would like to go to this page and add it to your favorates you can then use it to send me a question directly

http://www.justanswer.com/electronics/expert-robmark/

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Robert M.
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30 yrs. of computer experience in financial and marketing departments.