For simplicity sake, lets say I make metal widgets. I purchase raw metal from ‘ABC Corp’ and convert the metal into widgets. The raw metal purchase goes as an expense for my company ‘Widget LLC’
At the end of the year I have $10k worth of widget inventory. How do I deal with this from an accounting/tax perspective? All examples I’ve seen online are for purchased inventory but I’m a manufacturing business so idk how that works? Is it any different?
You track the raw materials you originally bought as expenses and you track the value of the finished product as assets (matters for valuation of the company).