Convert R&D purchases to inventory


J

John

I have recently started a new business manufacturing electronic assemblies.
I purchased a few thousand dollars worth of components last year and I simply
called the purchases "non-inventory, R&D purchases". There are about 100
different component types within my assemblies. Many of the components were
consumed in failed attempts to design a product for sale. Now in 2007, I
have a product ready for the market. I now know exactly which components are
included and I'm ready to begin the process of creating kits containing the
individual components. I want to do this in one fell swoop. I want to
perform an inventory count of the components that I actually use and record
them as inventory. All components I purchased that are not used in the
products will simply be an R&D expense that I write off.

Exactly how do I go about converting Non-inventory to real inventory? Do I
just create the inventory at zero cost or do I debit the R&D account? I'm
new to this, so I will need a fairly detailed response about debiting and
crediting various accounts.

Thanks in advance. (Using SBA2007 pro (or at least trying to use it))
 
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