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Sale invoices for Inventory

looks fourteen buying at retail and selling inventory to a customer this is Ken Boyd the owner of st. Louis test preparation here is the Facebook page the website and other details that I'll get to a little later on what I'd like to envision in this scenario is buying a product from a vendor at wholesale and reselling it at retail up until now sturdy blue jeans which is the company I have listed up here has been a manufacturer spending money on materials and labor and reselling to a store called Elm Street clothing reselling blue jeans in this example we're going to buy blue jeans in inventory and resell them for a markup so at the very beginning I have to create a new item so if I go to list item list I'm going to click on a new item called outdoor jeans I'm going to say ok to that step and so it's a part of inventory it's called outdoor jeans there's a part number for tracking when I go out and make a purchase order it says outdoor jeans bought an inventory intended for resale to clients and the sales transaction it says outdoor jeans sold from inventory I buy them at a cost of 40 it's a cost of goods sold account right there I sell them at $60 a pair and I have a sales account called sales income outdoor jeans you'll see that it tells me in the inventory information how many I have on-hand based on a P o a purchase order we'll get to that later so I'm going to click OK my next step is after creating a new item I created an estimate so if I go to customers estimate and I click previous what I did was I selected my client Elm Street clothing this all automatically loaded I selected the item outdoor jeans the $60 price loaded I entered a quantity and hit return and it multiplied 200 pairs of pants times $60 a pair to give me $12,000 so I've got an estimate you will also see that there is detail running off to the right that is a running total of the estimates invoices I created and other data that you've seen on prior transactions which i think is handy so we do that I'm going to hit save and close now I actually have to go order the genes that Elm Street wants to buy so I place a purchase order it's a little sensitive you need to click on it just once so I'm going to hit previous I'm my vendor who's going to I'm going to buy the genes from his mountain top denim you can see there the vendor and they're going to a mountain top denim are going to strip the jeans to me it's sturdy blue jeans all this item information fills when I click on outdoor jeans the explanation I manually loaded that I'm going to buy 200 jeans the cost of 40 is from the item data that I entered earlier so it's $8,000 so I'm going to save and close there so the next thing I'm going to do is receive inventory assuming that they also send me a bill receive inventory with a bill now there's a prompt here my vendor is mountain top denim and I get a I get an open POS purchase orders exist command open purchase orders exist for this vendor do you want to receive that is receive the inventory against one or more of these items I'm going to hit yes there's the purchase order it's it's purchase order number two today when I'm making the video for mountain top I'm going to hit OK and the data loads in the system mountaintop denim automatically loads here so I'm going to put a little check mark next to this transaction I'm going to hit OK and I see that outdoor jeans item 200 pairs my cost of 40 total amount is going to be 8,000 per purchase order number two I'm going to hit save and close and it's going to save my transaction now that I have the jeans in inventory I'm going to go create an invoice so I'm going to go to customer create invoices when I click on the customer and I go to Elm Street clothing it gives me available estimates well the estimate that I made today was the 200 jeans at a retail price of $60 this transaction I'm going to hit OK and you can see that when loads is outdoor jeans 200 pairs retail price is 60 $12,000 save and close so now I've got an invoice that I said to someone so the loop here is I created an item an estimate I skipped sales order and just created a purchase order for the jeans receive them with a bill so now I have the inventory and then I created an invoice and I loaded the invoice using the estimate let's just see how things would look in the reports the financial statement reports I'm going to go to reports company financial let's go to the balance sheet first you see I've got accounts receivable money that people owe me I'm going to click on that and I see the invoice number two I'm sorry number three their invoice is different from the estimate number four Elm Street clothing my client there's that sales income account for outdoor jeans if I expand it a little bit there it is the receivable is a debit an asset account for twelve thousand dollars that was from the invoice that I just created do I want to memorize this report I'm gonna hit no.4 right now you'll see that there's no inventory listed in the asset section of the balance sheet because while I receive the inventory in I sold the inventory so I don't have any inventory right now if I go to reports company financial profit & Loss standard and I look at sales income outdoor jeans there is the income that I have for the jeans the income category that I have for the jeans one last thing in the cost of goods sold section if I click on the detail there is the invoice number 3 Elm Street was the customer outdoor jeans the other side of the transaction we've split it with accounts receivable there's the $8,000 the 200 jeans at a cost of $48,000 there's my cost of sales so not going to memorize the report I had costs of sales just for the outdoor jeans of 8,000 I had sales income of 12,000 so the profit just from the outdoor jeans was $4,000 12 minus 8 that's as far as we'll get on this retail transaction the website STL tests net we do individual online tutoring and QuickBooks help we have additional videos and expels Excel spreadsheets that's hard to say on the website all of our YouTube videos are now linked to the website as well the book cost accounting for dummies we're teaching in a free online course each week and you'll see a link on the website to the blog accounting accidentally where I blog on many of the topics I have videos on thanks for watching and we'll see you next time