I started using Quickbooks Pro on 1 January of this year, although the biz started the year before. We are small builders, about 3 log cabins per year. At the end of 2004, we had 1 finished but unsold cabin and 1 partially finished cabin. Our CPA listed the amounts of the costs of the 2 cabins as inventory on our balance sheet for taxes. Although I’m getting to know my way around Quickbooks (sometimes by trial and error, sometimes by an “aha!” moment in the middle of the night, I don’t know about inventory. Everything I’ve read about inventory in quickbooks doesn’t seem to pertain to a thing like a built house, more like inventorying widgets. Any help?
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It is inventory. If it was a cabin on land it would be an asset. Think of it this way.
If you were building chairs, each chair would be inventory as well. You keep them in stock until sold. Same thing as a cabin that will leave your possession when sold.
Look at is as a portable trailer. I do the books for a construction Company that also develops properties and builds house on them
Jill
Thank you for your help. I am very much the non-accountant type and doing the books is new to me this year. Is it possible for you to describe step by step how to actually put it in inventory?
That I am unsure of.
I think that you need to record each cabin as a work in progress and all costs related to that go into Cabin # 1 or two etc.
I think you really need to talk to an expert in Inventory and Quickbooks here. This is a real sticky situation with the IRS. I don't know if labor costs will go to each cabin or just materials.
Jill
Have you looked over at JLC, they have a Quickbooks section.