Spoilage

[ILLMAS]

Let's a say a grocery store has 10 cans of creamed possum in inventory as of 12/31/17, in 2018 the department of health picks up a can finds that all 10 cans have expired and asks to be throw away.  Is this a good example of spoilage? 

Thanks

[Lee B]

As a practical matter, when inventory becomes unsaleable and is thrown out, it's not counted in the next Physical Inventory

or if a perpetual inventory is being used the disposition of the inventory is recorded.

Spoilage or shrinkage is really a cost accounting measure used in order to keep better track of COGS & Gross Profit.

Where as Inventory Write Downs i.e. Lower of Cost or Market is both a cost accounting measure and a tax deduction.

 

[Elrod]

I'm not sure ILLMAS, if you are asking a real accounting question......But....Here is some real Spoiled Possum....

                                                                

 

In fact I hand a bad can of out dated possum, last Halloween ( October is bad month for me)...This is what happened....

 

                                           

 

                                           This doctor made me all better though.... 

 

                                                                                                             

[WITAXLADY]

you have too much time - come do some taxes for me!

[Elrod]

13 hours ago, WITAXLADY said:

you have too much time - come do some taxes for me!

I would WITALADY,  but it's been 10 years since I've done any tax prep.  I think you'd get a lot madder at my mistakes, than my sideways humor.

I'm Just trying to be kind to everyone.....