marlenedz
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posted on December 24, 2000 02:22:41 PM new
I sell mainly videos and books. My question is regarding Schedule C and computing inventory. (I will be contacting my accountant but he is on a 2 week vacation and I have some free time on my hands).
Is there any way around not having to claim your inventory in terms of beginning inventory and ending inventory and just claim profit and loss on what is sold? It's gotten to the point where I will have to hire someone to just do the bookwork. My records are very accurate regarding what I sold, the price I paid, and what I sold it for less all the Ebay fees etc. However, my records are not all that accurate for what I have in total dollars stored down the basement. I can figure it out but it will be time consuming. I may go out and buy 100 $1 books and whenever I get a chance I'll list them. But to type each one up in a database with thier name and price is a bit time consuming and frankly the information isn't all that useful to me. All's I'm interested in what sells and the profit/loss made. Is there anyway around this or is this just wishful thinking on my part?
Thanks.
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molly001
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posted on December 24, 2000 04:01:06 PM new
Gee, I wish I could be of more help but EVERY year my accountant MAKES me do an inventory. She accomplishes that by telling me if I don't give her a figure, she'll give me a figure. Works every time! This is the age old problem with business and carrying inventory - gotta keep track of it!
Of course, I could be wrong but.....
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dman3
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posted on December 24, 2000 04:40:20 PM new
molly001
You could be wrong but my bet is that your not bigest head ache for any business is inventory days usually the frist of each month one full inventory at the start or end of the year 
You dont nessarily have to do the inventory count you could do a estimate but this could hurt if your estimate is way off.
http://www.Dman-N-Company.com
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keziak
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posted on December 24, 2000 05:00:16 PM new
I have been worrying about this, too. My solution was to list essentially everything on ebay during FLD. Anything that doesn't sell I'll dispose of unless I really think it has a chance on half.com or wherever. In any case it will be a very small inventory. I'll make a note of its value at the end of the year and hold that is sufficient in case our accountant asks me about it.
I feel so at sea, though about issues like what sort of accounting system I am supposed to use. I can see why many [most?] people try to hide their ebay sales profits because getting all these details straight seems almost more trouble than the money is worth.
Almost, but not quite..
keziak
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dman3
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posted on December 24, 2000 05:44:52 PM new
Actually its not that confuseing get a book and as you get inventory write in the book each item and the amount you paid for it as you list and when they sell check it off at the end of the year all items in the book not checked off is your end inventory add the purchase prices up and your all set for that part of inventory.
on the other side of bussiness is the exspences keeping track of all it cost you for tape boxes packageing item computer parts and every other little exspence you had you want it to be more then you made or as close as you can get to $0.00 profit.
http://www.Dman-N-Company.com
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chinaguys
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posted on December 25, 2000 02:03:43 PM new
All the IRS is really interested in is how much your inventory cost, not what the individual items are. Take your receipts from your purchases and add them up. If you started your business this year, your starting inventory is 0; your closing inventory is:
(starting inventory + purchases) - cost of items sold/basis
This closing inventory then becomes your starting inventory for 2001.
Basically what I do is keep a record of how much I spent buying the stuff; not everything is literally inventoried.
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dman3
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posted on December 25, 2000 02:10:24 PM new
That would be great if all had receipts for all inventory they purchased but in many cases inventory is bought at garage sales and flea market and there is no receipts.
I personnally wouldnt count all Inventory without a receipt but some I guess are trying too so in this case you need to know every item and recall what you paid.
http://www.Dman-N-Company.com
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foolproof
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posted on December 25, 2000 02:13:28 PM new
Well unfortunately you will have to provide those numbers, accurate or not. Those two figures are the main components in determining your COGS or Cost of Goods Sold. Once you have the first years numbers then it is easier from then on. I always tried to maintain both business'(my wife and I) inventory but it got to be too much. If you are doing the numbers and can afford it you can get basic bookeeping for about $100 a month. You will pay extra for the quarterlies and taxes. Hey, it was worth it for me.
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chinaguys
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posted on December 25, 2000 02:22:52 PM new
I think most of the books on running an antiques business suggest keeping a little notebook for just this purpose in which you record the amount you spend at each garage sale, etc.
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helnjoe
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posted on December 25, 2000 02:25:06 PM new
marlendez: You do not have to list each item by title, etc.
Group your items by like and cost:
videos, 100 @ 1.00 = 100.00
videos, 20 @ 2.00 = 40.00
books, 15 @ 1.50 = 22.50
Total: 162.50
It is the total that you report. When you do your inventory anything that you give to charity, get a receipt. Anything that you toss, record that. These are deducted from your total inventory.
This is your beginning inventory for 2001.
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