Jason,
Not real sure if your question is asking for more than basic accounting
entries, but you can find plenty of online examples and texts showing the
proper debits and credits. Focus your search on manufacturing examples. You may
not need *all* of those related entries, but you will definitely use some of
them. Also, talk to a local CPA to make sure you are setting up your accounts
properly for your jurisdiction. Initial consultations are usually not terribly
expensive and are well worth their price when weighed against costly mistakes.
For GnuCash, first you need to read the Help Manual and the Tutorial & Concepts
Guide. Those might be available in the Help menu, but are always available on
the GnuCash website.
You’ll want to pay particular attention to the Business Features.
Set up your Vendors and Customers.
Create Bills from your Vendors for the inventory purchase on account (the A/P
purchase from Cosmetic LLC). Optionally do the same for the two cash purchases.
(if you use the business features for these, reporting will be more sane later,
but you *could* simply enter them as regular transactions. I’d recommend using
the business features regardless of payment method or timeframe for all regular
inventory/supplies/service vendors) For cash purchases entered in the Business
Features, simply pay those bills immediately after posting.
Your line items on the bills should all post to something like Assets:Current
Assets:Inventory:Raw Materials. You could break down ‘Raw Materials’ with sub
accounts for the types of materials if you have some left over after a
production run and need to track these separately. If you always use *all* raw
materials for each production run as they are purchased or you never need to
know that some of your remaining materials are tubing versus packaging et
cetera, then you don’t need the sub accounts. (note, it is easier to combine
accounts later than to separate transactions into their own accounts - that’s
from experience doing both many, many, many times. If you record detail now, it
is there if you need it. If you don’t, you might not be able to recreate it
later.) Please also note that GnuCash does not have features to track
individual inventory items. For that you’ll need a separate inventory
management program.
--
*side note - I see you specified ‘Capital’ as paying for inventory purchases
from ‘Packaging LLC’ and ’Tubes LLC’ rather than ‘cash’ or ‘checking'. What you
should have here is an initial entry upon paying in that capital (from yourself
or an investor) balanced between Cash/Checking and an Equity account. Depending
on what type of business entity this is (sole proprietor, partnership, etc.)
you may need to set up your equity accounts differently. The simplest example
would be:
Dr. Assets:Current Assets:Cash (or Checking as relevant)
Cr. Equity:Paid-in-Capital
Let’s assume you paid in $500 as opening capital, the result of the above bills
and this equity transaction are the following balances:
Assets:Current Assets:Cash $160
Assets:Current Assets:Inventory:Raw Materials $850
Equity:Paid-in-Captial $500
Liabilities:A/P $510
-now, back to the other entries
--
Create a manual transaction as needed for Work In Progress and/or Completed
Goods—e.g.,
as the product is being made:
Dr. Assets:Current Assets:Inventory:Work-in-Progress$850
Cr. Assets:Current Assets:Inventory:Raw Materials $850
after production is complete:
Dr. Assets:Inventory:Completed Goods$850
Cr. Assets:Inventory:Work-in-Progress $850
or, if production is a one-day short term affair, skip the Work-in-Progress
steps:
Dr. Assets:Current Assets:Inventory:Completed Goods $850
Cr. Assets:Current Assets:Inventory:Raw Materials $850
You’ve now shifted your Raw Materials asset to your Completed Goods asset.
When you sell your products, create Invoices to your Customers for the sale
amount. (again, as a cash sale, you could bypass the business features, but
your reporting could get cumbersome later) Simply ‘pay’ the invoice right after
posting it. Your line items on your invoice should post to Revenue:Sales (or
some similar account, you may eventually have other forms of revenue, and may
desire to have sub accounts of Sales to track their major type)
GnuCash does not understand that your line items constitute Completed Goods
inventory that is going to be sold at a profit, nor how to calculate the COGS,
so you’ll have to do this as a separate manual transaction
Dr. Expenses:Cost Of Goods Sold $ 850
Cr. Assets:Current Assets:Inventory:Completed Goods $ 850
If you really want to do a
