Adjust the Inventory and Core Values

Step 1: Generate Inventory Report in GEM-CAR

Go to the menu Inventory > Reports > Inventory.

• Select the categories (do not select those related to service or labor)
• Do not display products with zero or negative quantities.

When: the last day of the month at the end of the operations or the first morning of the month. (Optional: use a backup copy)

Who: determine who is responsible: controller, parts manager, and owner (in order of priority).
What: inventory report with inventoried categories.

Step 2: Generate a Balance Sheet for the Previous and Current Month

Retrieve your inventory value at the beginning of the month.

Inventory Adjustment

Beginning of month value: A (inventory value in your balance sheet)
End of month value: B (GEM-CAR report)
Inventory variation C: B - A

Example: Starting inventory $30,000, GEM-CAR inventory $100,000, variation $70,000

GL Accounting Transaction

1535 Inventory of parts $70,000 CREDIT
5020 Cost of Goods Sold DEBIT $70,000

Cost of Goods Sold

Parts Sales: D
Parts Purchases: E
Inventory Variation: F

Cost of parts sold G: E - F

Example: D = 230,000, E = 240,000, F = 70,000, G = 170,000

Profit on parts: 230,000 - 170,000 = 60,000
Profit margin: 60,000 / 230,000 = 26.1%

Core Value Adjustment

Go to Point of Sale and click on the Returns button.

Then filter by “Old Core:”

• Validate credit entries

• Delete cores if necessary

Note:
• Non-credited cores must be subtracted from the cost of goods sold
• Credit transaction for cores receivable

GL Transaction for Cores

YYYY Receivables (Cores) DEBIT X
5020 Cost of Goods Sold CREDIT X