How to buy from inventory for internal use?

Posted by Phil Nelson on May 4, 2009, 11:20 am

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I still don't know exactly how to do this (or perhaps I have forgotten),
but I must. I am a (very small) C corp and need to use items originally
intended for resale (sales tax was not paid at time of purchase).
QuickBooks Pro 2009.

Any hints out there?

I guess I am good as far as setting up my company as a customer and
invoicing, which I believe will take care of the sales tax obligation,
but not entirely clear on what happens to the reports, income tax, etc.
when I pay the invoices, I guess through a clearing account? Doesn't
this inflate the company's gross? Is that normal?

--
Phil

Posted by Frank Kirk on May 6, 2009, 2:20 pm

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Phil Nelson wrote:

> I still don't know exactly how to do this (or perhaps I have forgotten),

> but I must. I am a (very small) C corp and need to use items originally

> intended for resale (sales tax was not paid at time of purchase).

> QuickBooks Pro 2009.

> Any hints out there?

        Go to Items (or Item List) --> Activities (tab at bottom) --> Adjust
Quantity on Hand. Then just fill out the screen, being sure to enter
the adjustment account, class, etc. Enter the new quantity on hand.

        Don't know what state you're in, but here in NC the Sales Tax report
has a line for items purchased for personal use. I just enter the cost
of the item that was adjusted in the previous paragraph, & it computes
sales tax.

        Hope this helps...

Posted by Haskel LaPort on May 6, 2009, 7:53 pm

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> Phil Nelson wrote:

>> I still don't know exactly how to do this (or perhaps I have forgotten),

>> but I must. I am a (very small) C corp and need to use items originally

>> intended for resale (sales tax was not paid at time of purchase).

>> QuickBooks Pro 2009.

>> Any hints out there?

> Go to Items (or Item List) --> Activities (tab at bottom) --> Adjust

> Quantity on Hand. Then just fill out the screen, being sure to enter the

> adjustment account, class, etc. Enter the new quantity on hand.

> Don't know what state you're in, but here in NC the Sales Tax report has a

> line for items purchased for personal use. I just enter the cost of the

> item that was adjusted in the previous paragraph, & it computes sales tax.

> Hope this helps..

Most users do not realize that in many cases taking items out of inventory
and using it for use in their own business results in a transaction subject
to use tax. Pulling items out of stock and donating the goods to charity can
also trigger a use tax situation. With so many states today cash starved you
can bet the auditors are on the prowl for theses transactions.

Posted by Phil Nelson on May 7, 2009, 4:36 pm

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Frank Kirk wrote:

> Phil Nelson wrote:

>> I still don't know exactly how to do this (or perhaps I have forgotten),

>> but I must. I am a (very small) C corp and need to use items originally

>> intended for resale (sales tax was not paid at time of purchase).

>> QuickBooks Pro 2009.

>> Any hints out there?

> Go to Items (or Item List) --> Activities (tab at bottom) --> Adjust

> Quantity on Hand. Then just fill out the screen, being sure to enter

> the adjustment account, class, etc. Enter the new quantity on hand.

> Don't know what state you're in, but here in NC the Sales Tax report

> has a line for items purchased for personal use. I just enter the cost

> of the item that was adjusted in the previous paragraph, & it computes

> sales tax.

> Hope this helps...

That's too easy! Thanks!

I couldn't find that in the help or searching the web.

--
Phil

Posted by Golden California Girls on May 7, 2009, 9:02 pm

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Phil Nelson wrote:

> Frank Kirk wrote:

>> Phil Nelson wrote:

>>> I still don't know exactly how to do this (or perhaps I have forgotten),

>>> but I must. I am a (very small) C corp and need to use items originally

>>> intended for resale (sales tax was not paid at time of purchase).

>>> QuickBooks Pro 2009.

>>>

>>> Any hints out there?

>> Go to Items (or Item List) --> Activities (tab at bottom) -->

>> Adjust Quantity on Hand. Then just fill out the screen, being sure to

>> enter the adjustment account, class, etc. Enter the new quantity on

>> hand.

>> Don't know what state you're in, but here in NC the Sales Tax

>> report has a line for items purchased for personal use. I just enter

>> the cost of the item that was adjusted in the previous paragraph, & it

>> computes sales tax.

>> Hope this helps...

> That's too easy! Thanks!

> I couldn't find that in the help or searching the web.

It also means you will have to enter another adjustment transaction when you pay
your sales tax because your sales tax liability account won't have the right
amount in it and your P&L won't either. It is only off by the tax so unless you
pull a lot of stuff or a big item, it can wait.