How can I enter a beginning balance for inventory?
I have Quickbooks pro and I don't want to track my inventory, I just want to enter a whole sum amount for my beginning inventory and my ending inventory.
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bMZDZRmFyr346iacfA8pyY
03/17/10 12:00pm PDT
Viewed by asker 03/23/10 8:23am PDT
Viewed by asker 03/23/10 8:23am PDT
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gusb83
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03/18/10 1:25am PDT
The solution
Sure. Create two other current asset accounts: Beginning Inventory and Ending Inventory. Create two COGS account "Beginning Inventory" and "Ending Inventory" as well as a COGS for your purchases.
Create a journal entry to add value to the Beginning Inventory Asset account and use the Opening Balance Equity Account as your offset. Debit Beginning Inventory and Credit Opening Balance Equity. This will put the value of the inventory asset on your books. Rename Opening Balance Equity "Owner's Additional Contribution" because technically this should be your retained earnings but you don't want to mess with your retained earnings.
Use the Purchases COGS for all of your inventory purchases. If you track LIFO or FIFO separately on an Excel Spreadsheet and can estimate the ending value of the inventory for reporting purposes then make this journal entry:
Beginning Inventory COGS xxx (debit)
Beginning Inventory Asset xxx (credit)
Ending Inventory Asset xxx (debit)
Ending Inventory COGS xxx (Credit)
You are basically transferring the value from the beginning inventory from the asset to the COGS and subtracting your ending inventory. This will give you accurate financial statements.
If you don't know how to track FIFO and LIFO and just want your accountant to do it for you, Set up the file like this anyway and put your accountant to good use, he will not have any excuse for overstating your COGS on your taxes. :)
Hope this helps and good luck.
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Rustler
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03/18/10 4:39am PDT
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Accounting is done using a double entry, so you are not going to be able to just enter one number, you will have to do some math if you are not going to track inventory by item.
All you really need is an asset account for inventory, and a COGS account.
Use the journal and for the invetnory opening balance
debit inventory asset
credit opening balance equity
Post your purchases to the inventory asset account as the year goes by
At the end of year
calculate the ending inventory value
Subtract that value from the total value held in inventory asset to get the value of inventory sold
do a journal entry
debit COGS for the value of inventory sold
credit inventory asset for the value of inventory sold
Then when the first of the new year comes along, roll up equity and retained earnings (which is last years net profit brought forward)
See this entry for equity roll up
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