Adjust Item Value

Consignment?! They are not inventory items!

Define adjust values.

To elaborate on other responses: If qty=0, your COST (the usual meaning of "value" in accounting) is irrelevant. However you can easily change the SELLING PRICE of an item, which is completely unaffected by quantity.

Most accountants try to avoid the term "value" as it can have different meanings in different contexts. So, what do you really mean - "cost", or "selling price"?

!-!

You my friend have a world of patience. I hate and refuse to second guess what an OP has on their mind. When looking for free advice the least one can do is give as much information as possible to make the job of the one giving help as simple as possible.

They can be. Its easier to track consignment items for insurance/loss/theft purposes when you have them listed as inventory parts. They just don't get listed as inventory assets but rather liabilities.

To elaborate on other responses:

**First of all thank you for the response. Sorry I have been traveling and don't get back in here for a few days.

Let me try to elaborate on what I am trying to do, I will try to keep it simple and clear. We are selling rings that we get from a manufacturer on consignment. We have 100 of these rings entered in the items as "Inventory Part" with a "0" Qty on hand, a cost and a selling price. When we scan the ring as they are sold on invoice we naturally get a -1 as Qty on Hand in the item file. At the end of the month we run a report for the manufacturer to show them which rings have been sold at WHAT COST and then they bill us and send us new rings to replace the sold ones. These new replacements now have a higher cost so we want to adjust the cost and selling price before the new one is sold. By adjusting the cost in the "Edit Item" does not change it when I run a report, which leads me in going into "Adjust Quantity/Value On Hand" and adjusting the value or "Cost." However when I do this I cannot Change the value when the Qty on Hand = 0. I addition if you know a way QB2006 Premier can report items sold by vendor it would be wonderful.

Thanks again for the help, I do appreciate the time. Tim

You are leaving out an important step. I don't know if you just forgot to mention it or you are not performing it.

When you receive the invoice from the vendor for the items reported as sold, you must enter it as a "Receipt wilth Bill". This step records the payable to the vendor, reverses the negative inventory valuation and restores the quantity on hand for each item back to zero.

When you receive replacement goods make sure you modify their sales price and cost if needed, before you sell them.

QB can report items sold by vendor (Consignor). I suguest you read the help sections on Consignment Sales in QB so you get a better handle on this topic.

We do enter "Receipt with Bill" for all of our inventory but it is after the fact, I will explain with the following timeline.

1. 01/01/06 we receive 100 items from our vendor on consignment.
2. Item #R1001W is listed to cost us 0.
3. 01/15/06 we get an email memo from the vendor stating that Item#R1001W has gone up, because of the volatility in the gold & diamond markets, to 5 our cost when sold.
4. 01/15/06 I go into "Adjust Quantities/Values On Hand" and see item #R1001W but the value is 0 because we don't own it. I can't change the value or cost.

** I have tried changing the cost in the "Edit Items" but it won't change the cost I get when I run "Sales by Item Summary" to show the cost and sale price of Item #R1001W. When I run "Sales by Item Summary", Item #R1001W still shows $400 not $475 even though I chance the cost in "Edit Items."

**Also, I have read the help section in regards to Consignment Sales and it says it pertains to the retail version and not Premier. I am using 2006 Premier for Wholesale and Manufacturing.

Your timeline does not make any sense. I can't determine from what you are saying if the item was sold to a customer before or after you are told about the price change from the manufacturer. You need to include the "Sale" and "Receipt with Bill", in your timeline for anyone to understand your problem.

Te

Does not matter. With the exception of Simple Start, all versions can generate Item sales by vendor as described in the help sections on consignment sales.

Your timeline does not make any sense. I can't determine from what you are

Alan,

The timeline doesn't include the "Sale" because it has not happened yet. We may have an item in stock on consignment from the vendor and it may change price multiple times before we sell it. To finish the timeline I could add we sold the item on Feb. 1, after we were notified it was increased in price while it was sitting in our stock. When I was notified back on 1/15 that it went up to $475 I changed the selling price but was not able to change the cost value because the Qty is 0. We have 100 of these items that we do a steady business with so I would like to find a way to adjust this cost on a monthly basis irregardless of when we sell the piece.

Thanks again, I am trying to give you as accurate a picture as I can because I really want to make this work.

Tim

Ask your accountant if the following method will work for you:

Consignment item is setup in QB as an Inventory Part with COGS and income accounts being treated normally.

At the bottom of the screen change the account for Inventory Asset to an Other Current Liability account called Consignment Items. Enter the qty on hand and close.

Go into the Consignment Items register, double click on the entry you just made and you'll find yourself at the Inventory Adjustment screen. Change the drop-down box at the top from Opening Balance Equity to an Other Current Liability Account called Due to Consignor.

The two OCL accounts you just created should have identical amounts in them. When you sell an item the CI account will decrease but until you pay the manufacturer for the cost of the item your DtC account will remain the same. You would record the check written to the manufacturer against the DtC liability account.

You still havn't told us in your time line when you record the "Receipt with Bill".

I don't want to sound rude but this should not be more difficult than pulling teeth. If you are walking us through the events as they occur then at one pont a sale must occur and you must pay the vendor. Take either one of these events out of the equation and you are out of business.

Well I am a CPA and I would label the Other Current Liability account "Goods sold on Consignment". I would leave the quantity at zero.

When the item is sold, QB makes the following journal entry based on the current cost (xxxx) entered the last time the item record was modified.

Debit - cost of goods sold xxxx Credit - Goods sold on consignment xxx

When you enter the Receipt and Bill, QB makes the following journal entry:

Debit - Goods sold on consignment xxxxx Credit - Accounts payable xxxxx

The quantity is now set back to zero and the internal inventory value is also set back to zero. (internally the item valuation was set correctly to a negative amount).

Tara,

You are introducing an additional level of complexity that is not required. KISS is rule of the day. Straighten out and fly right.

You'll have to speak to the two CPAs that like the method I described. One CPA gave me the method for use on our mutual client and a different CPA approved the method for use with another client of mine.

You still havn't told us in your time line when you record the "Receipt with

Ok, we record the "Receipt with Bill" on 02/02/06, Net 30.

Ok, to recap here are the begining events in the sequence with the correct QB action..

1. Manufacturer sends you 100 rings to sell on consignment and indicates the current cost of each ring.

QB: Under inventory activities select add item: Add each of the 100 rings as stock items. For each ring along with the description, enter the sales G/L account, the price you expect to sell the ring, the CGS G/L account and purchase price you expect to pay the manufacturer. The quantily is left at zero.

1. The manufacturer notifies you that the price has changed for several of the rings.

QB: Open up the item list, select each ring involved and change the purchase price to the new amount.

You indicated that you go into "adjust quantity/value on hand", this is wrong. There is no reason why you should be in this section of the program.

Alan,

I have been away and just got back to check your response. I understand the simplicity of changing the purchase price in "Edit Items". Then I ran a "Sales by Item Summary" report, the COG that shows up is the "Avg Cost" at the bottom of the edit screen not the "Cost" that I just changed. This is the problem.

Thanks Tim