Business Accounting Question

[Robert Heller]

At Fri, 11 Mar 2011 14:56:03 -0700 Mark Phillips <mark at phillipsmarketing.biz> wrote:

> 
> Ok, but how do I handle the check I paid to the merchant for the sweatshirt?
> 
> At time of purchase:
> debit merchandise expense $15
> credit checking $15
> 
> At time of sale:
> Debit checking $25
> credit income $10
> credit merchandise expense $15
> 
> At the end of the day, my merchandise expense is $0, which does not seem
> correct.

Ah but it is.  Your merchandise expense was covered by the sale, with
$10 'profit'.

> 
> I would rather not get into inventory and cogs, if I can avoid it.
> 
> What am I missing?
> 
> Mark
> 
> On Fri, Mar 11, 2011 at 1:46 PM, Paul Schwartz <pmjs1115 at yahoo.com> wrote:
> 
> > given your suggested setup, you/I would credit the merchandise expense
> > account for the $15, debit your checking/bank account for $25, and credit
> > your income/donation account for $10.
> >
> > HTH
> >
> > Paul
> >
> > ------------------------------
> > *From:* Mark Phillips <mark at phillipsmarketing.biz>
> > *To:* Gnucash Users <gnucash-user at gnucash.org>
> > *Sent:* Fri, March 11, 2011 12:06:24 PM
> > *Subject:* Business Accounting Question
> >
> > I have a US non profit corporation that takes in donations for out two
> > softball teams. I recently had new uniforms printed, as well as t-shirts
> > and
> > sweatshirts for parents. The uniforms belong to the club (ie are returned
> > when a play leaves), so I don't allocate the cost of the uniforms against
> > the individual donations from each parent. However, when I sell a
> > sweatshirt
> > with our club logo on it to a parent for $25, and the cost is $15, I have
> > to
> > deduct the cost of the sweatshirt from the parent's donation. I am having a
> > problem thinking through the flow of transactions/accounts.
> >
> > Simple example: Purchase a sweatshirt for $15, sell to a parent for $25
> >
> > 1. Pay vendor for sweathsirt
> > debit club merchandise expense account  $15
> > credit checking account  $15
> >
> > 2. sell sweatshirt to parent
> > credit Income/donation account for parent  $25
> > debit some account?? for cost of sweatshirt  $15
> >
> > But that is as far as I can go. What account do I debit for the $15 cost of
> > the sweatshirt? How does that account relate to the club merchandise
> > expense
> > account?
> >
> > Thanks,
> >
> > Mark
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>          

-- 
Robert Heller             -- 978-544-6933 / heller at deepsoft.com
Deepwoods Software        -- http://www.deepsoft.com/
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