Wandell, Greg on tue 4 jun 96
At a show on Saturday, I broke a piece and was in the process of
throwing
it a way, when a fellow exhibitor remarked that I should record the
broken
piece as a loss. Intellectually, I realize that loss is part of the
production cycle, but I never thought of that. So, how do I
implement a
system of recording and valuating the pieces that I break?
Specifically,
how do I:
1) Record and valuate a loss in the greenware/leather hard stage?
i.e., I
trim through a platter?
2) Record and valuate a loss in the bisque stage? i.e., I have a
"s"
crack on the bottom of a platter after I bisque?
3) Record and value a loss of a glazed piece? i.e., I glazed a lid
to a
pot?
4) How do I account for seconds? Would I record the loss as the
difference between the price of a "perfect" piece and the price of
the
second?
I have an excellent recording system for costs that I have thought
of,
however, It appears that I have not thought well enough. I believe
that is
called learning curve.
Thanks for your help
Gregory F. Wandell
GWandell@TMS-HQ.COM
Bethesda, Maryland
Motorcycle weather, finally!
"Ronald Galyen - Teacher - Mt. Carmel Elem RGALYEN" on wed 5 jun 96
I recently asked the person who does my taxes similar questions and
questions regarding pottery as donations to charitable institutiions.
I was told that the only thing that I could deduct was the cost of the
materials and I have already done that by deducting all materials as
business expense. Somehow, there should be a way to account for *time*
that is lost in pieces that are lost.
However, I understand that there is more than just one way of keeeping
records for a shop or business. Maybe the advice that I got would apply
to my situation but not to others.
===================================
= Ronald W.Galyen =
= rgalyen@mars.esc.k12.in.us =
= Brookville, Indiana, U.S.A. =
= "Where I need to do more potting=
= and less posting." =
===================================
On Tue, 4 Jun 1996, Wandell, Greg wrote:
> ----------------------------Original message----------------------------
> At a show on Saturday, I broke a piece and was in the process of
> throwing
> it a way, when a fellow exhibitor remarked that I should record the
> broken
> piece as a loss. Intellectually, I realize that loss is part of the
> production cycle, but I never thought of that. So, how do I
> implement a
> system of recording and valuating the pieces that I break?
> Specifically,
> how do I:
>
> 1) Record and valuate a loss in the greenware/leather hard stage?
> i.e., I
> trim through a platter?
>
> 2) Record and valuate a loss in the bisque stage? i.e., I have a
> "s"
> crack on the bottom of a platter after I bisque?
>
> 3) Record and value a loss of a glazed piece? i.e., I glazed a lid
> to a
> pot?
>
> 4) How do I account for seconds? Would I record the loss as the
> difference between the price of a "perfect" piece and the price of
> the
> second?
>
> I have an excellent recording system for costs that I have thought
> of,
> however, It appears that I have not thought well enough. I believe
> that is
> called learning curve.
>
> Thanks for your help
>
> Gregory F. Wandell
> GWandell@TMS-HQ.COM
>
> Bethesda, Maryland
>
> Motorcycle weather, finally!
Jeremy/Bonnie Hellman on thu 6 jun 96
Ronald and other Clayarters--
In response to your post:
> I recently asked the person who does my taxes similar questions and
>questions regarding pottery as donations to charitable institutiions.
>I was told that the only thing that I could deduct was the cost of the
>materials and I have already done that by deducting all materials as
>business expense. Somehow, there should be a way to account for *time*
>that is lost in pieces that are lost.
Actually, you have already "deducted" the cost of your materials by
including them in your purchases (in cost of goods sold) and by NOT
including them in ending inventory. The IRS understands only money as an
expense (excluding barter which is an entirely different situation). If you
are not required to pay for something you don't get to deduct it. The value
of one's time (unless that person is an employee) does not appear on a tax
return. This is also true when you spend time working for a charitable
organization--you can deduct your out of pocket expenses but not anything
for your time!
> However, I understand that there is more than just one way of keeeping
>records for a shop or business. Maybe the advice that I got would apply
>to my situation but not to others.
No, the advice you got applies to everyone. It's accurate.
Bonnie (CPA by day potter by night except in tax season when a CPA by
night) in Pittsburgh, PA
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