1120 Sch A COGS

[DBAN1957]

I have a little S Corp that is closing his business. Beginning and ending inventory is the same same number, let's say $1000.00. There was no sales or activity for 2008. The inventory went to the shareholder. I did the debit to distribution and credit to inventory on the books. However, how do I show the Schedule A. If I show no ending inventory, I get a $1,000 for COGS. If I want to show no ending inventory or COGS, then I have to show negative purchases.

So my question is how do you show Sch A (COGS) on a final return when the shareholder takes the inventory

home? Do I leave ending inventory equal to the beginning inventory?

Thanks

Dave

[Maribeth]

You did have a sale in 2008; it was the sale of the inventory to your shareholder. Your journal entry s/b a credit to sales, debit to distribution, credit to inventory, debit to COGS. If your state imposes a sales tax, that would have been due at the time of the sale to the shareholder.

Maribeth