Obsolete - Non useable inventory

[S T]

Mfg client on Peachtree Accounting - accrual. Has some obsolete - non useable inventory of components for assembly build. (wiring, connectors, etc)

Best way to handle for writeoff, Credit Inventory and Debit COG, or create an invoice for Sale for a -0- amount through the Inventory/Sale system?

Thanks

Sandy

[Joe Btfsplk]

Obsolete inverntory

There may be some third alternative, but I would NOT believe it was correct to create a zero sales invoice. As a practical matter, though, it really wouldn't matter from a tax standpoint since the bottom line would be the same any way you accomplished it.

[S T]

Trying to Figure Out

Just trying to figure out how to get the inventory written off and accounted for in Peachtree! I am used to Quickbooks, and Peachtree is totally different.

Anyone have any suggestions!

Peachtree doesn't know, and no response from the Peachtree forums!

Thanks

Sandy

[S T]

Hey JG

Thanks for posting, can you give me more info, I am at a loss on this Peachtree Acctg and their Inventory System.

The client has been out of balance on inventory with a negative balance on the balance sheet since the beginning of the year and I had them call in a "Peachtree Consultant" which I am wondering how accurate from an accounting standpoint that has been. He found some entry problems, but now is just making journal entries, which really bother me from a tax standpoint!

Have you worked with Peachtree Mfg and their inventory system??

Sandy

PS you can always PM me.

[JG EA]

S T

You can see, as soon as I posted, I thought that I don't know enough about this to post and deleted the post.
I just remember, about 10 years ago that I was having a horrible time getting rid of something similar. I called QB (had a subscription service then) and they told me about "vendor clearing". They did say however do not quote them. I think the statute of limitations is up now. (jk)
If I recall correctly, I did this with journal entries. I can look in my book and see if I made any notes this week if you would like - that is if you are not in a hurry.

JG

[S T]

Thanks so much

JG,

The edit, delete feature on this Board is awesome for those of us that post, and change our minds, both you and I have done it in the past.

It is always good to share with you, and thanks for your offer, but don't worry and spend any time on this issue.

The Peachtree accounting is definitely different than QB. I have already talked with QB and they are trying to assist me hoping for the conversion of a Peachtree client, but so far we haven't arrived at a accurate entry.

I will just keep playing around in Peachtree until the numbers appear to look right! or better yet have the client call the "Peachtree Consultant" That is my dilemna.

Thanks as always for your assistance and support,

Sandy

[Hoosier Tax Guy]

Mfg client on Peachtree Accounting - accrual. Has some obsolete - non useable inventory of components for assembly build. (wiring, connectors, etc)

Best way to handle for writeoff, Credit Inventory and Debit COG, or create an invoice for Sale for a -0- amount through the Inventory/Sale system?

...

The Peachtree accounting is definitely different than QB. I have already talked with QB and they are trying to assist me hoping for the conversion of a Peachtree client, but so far we haven't arrived at a accurate entry.

Sandy

I had to laugh; you're trying to convert this client from PT to QB; I've been doing the opposite...converting people from QB to PT. In my experience, after switching, most clients think that Peachtree is easier to navigate; especially those without an accounting background. I guess it's all what you are used to...

Anyway, in answer to your original question, I have made inventory adjustments in PT many times; usually to correct a misposting to change inventory to actual per a physical count, but sometimes to just write off obsolete items.

I usually create a COGS account and name it something like "Inventory Adjustment" or "Write off of Obsolete Inventory". Then I debit that account and credit the Inventory account for the appropriate amount in an Adjusting Journal Entry. Some of these clients have been audited by IRS, and this type of entry has never caused a problem. The auditor will always ask for documentation as to WHY the inventory is being written off, and/or how we arrived at the figure being written off; but I've never had the adjusting journal entry challenged.

Good luck!

[Joe Btfsplk]

Inventory adjustment

You can make inventory adjustments in Peachtree. So writing off obsolete items would probably be handled the same as if your books showed you had 1000 wigets and you counted them and found there were only 900. Look at the Inventory portion of Peachtree and adjust the obsolete items as if you counted them and found a quantity of zero.

There should be a physical inventory periodically, and especially at year-end. There is a very good chance that the physical inventory will vary from the book inventory for any number of reasons.