File puptcrit/puptcrit.0412, message 70

Date: Tue, 7 Dec 2004 17:44:38 -0500 (GMT-05:00)
Subject: Re: [Puptcrit] Small business question...

Hey Fred,

Since the business does not sell the puppets (or even if it did... I used to sell quilts for a living) you only need to value the puppets and scenery, etc. (for these purposes) in terms of the cost of the materials used to make them.

You can choose to calculate your inventory on a "price" basis or on a "cost" basis.  The value of the puppets etc. does not include the labor cost to make it.   You should be consistent, though, with how you do your inventory for the IRS.

On the other hand, for INSURANCE purposes, you must value them for the REPLACEMENT cost, which includes the labor.

That confusing enough???

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