Velma asked:

If I am in the second-hand retail clothing business and I get a lot of clothing on consignment, do I have to individually inventory list all as inventory.

Also same business, if I get bags of clothing donated to me, do I need to inventory this as there will be only income showing from this. Is this classified as goodwill donations.

Gary Booth answered:

Since the clothing is on consignment and not included in purchases, taking inventory would not affect the financials; however, you would probably want to take inventory to ensure you agree with the consignor.

Next, since no cost is involved for the bags, they would not go into inventory and therefore, no cost is recorded; however, for business reasons you might want to keep track to see how quickly the inventory moves.

About the author

Gary Booth has over 20 years experience in the tax and accounting field. He operates his chartered accounting practice called Gary Booth CA Professional Corp. The six members of Gary’s team provide a wide variety of accounting and tax expertise to meet the needs of Gary’s clients.

Gary Booth CA Professional Corp is committed to providing excellent customer service and to exceed client’s business expectations. The services the firm provides includes:

• All types of personal tax returns from basic to complex
• Corporation tax returns
• Financial statement preparation
• Audits and review engagements
• Bookkeeping, GST and PST returns and payroll
• Certified quickbooks trainer and set up
• Business plans and business consulting

Gary can reached at 416 626 2727 x23 and www.garybooth.com.

 
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