Hi Cou,

Are you using average cost or FIFO (first in first out) as your inventory costing method?  You can confirm that by going to Setup, Settings, Inventory & Services and Options.

Also, are you using Locations for your inventory (this feature is only available in  Premium or higher)?

Thanks

Hi Keith,

Thanks very much for taking the time to reply.

I'm using average cost, as it makes sense for the rest of products we have, except the container recycling ones.  Yes, we use locations for inventory.  

I have just created a new variance account and changed all the inventory to link to a specific variance account instead of sharing an account of COGS.  Will this help?

COU

Hi Cou,

Suggestion is that you can look at that inventory record, Quantites tab first.  Since you use locations, plesae take a look at what is the quantity and value on hand in each location.

After you get the quantity number and total value of that inventory in each location, you can open your Inevntory Adjustments & Transfers window, and adjust that inventory in each location to zero in both qantity and total value.  You can do so by first selet the location in the At Location box.  Next, you can select the inventory under the item column.  Then, you can adjust the Qty column and Amount column. The Unit Cost column will automatically adjusted based on the Amount, which is the total value, you enter.

After you make the inventory go back to zero in both quantity and total value, you can again use the Adjustments & Transfers window the change the quantity and value to whatever you like for that item. 

Hope this helps

Hi Keith L,

Yesterday I adjusted the inventory quantity and total to be correct for my location using inventory adjustment.      Do you mean I should set inventory quantity and total to zero first, before setting the correct amount, and that will reset the COGS calculation?

COU

Keith method may fix the current and furture COGS but not previous calculations. If you run an Income Statement im sure the COGS is way out of balance. GJ = General Jounral Report.

Hi GwG,

Thanks for the reply.  I manually fixed those accounts by general entries yesterday.  Is that the proper way to solve it?   The numbers are correct right now.

Cou

Hi GwG,

Thanks for the reply.  I manually fixed those accounts by general entries yesterday.  Is that the proper way to solve it?   The numbers are correct right now.

Cou

Yes.... Next is to follow Keith's instructions then and save the data as TEST and post a few transactions with the reconciled item to make sure its calculating correctly

Thank you both Keith and GwG.  I just did a test and everything is perfect now.  Thank you!!

Hi Keith L and GwG, I was able to fix the COGS following your instruction a few months ago.  However now the "Inventory Adjustment" in the income statement is way off.  It is now -143000, and it is around the amount that I used to adjust COGS previously.    (I didn't notice it after making inventory adjustment.)

How can I get rid of this amount from inventory adjustment?    

If it's an income statement account, it will be closed to retained earnings at year end.

If it's on your balance sheet, and your inventory ledger is correct, and matches your balance sheet, it may have to be written off to Cost of Goods Sold.  

Check with your accountant on where / how to record it.