Updated July 31. 2014
Maintaining profitability in the Auto Repair Industry Chicago Illinois
One of the most difficult parts of doing accounting for anyone in the auto repair industry of Chicago is determining an auditable number for inventory.
A perfect example would be a carburetor for a 1971 Cadillac Deville. This part came out of a car that was abandoned at your shop ten years ago, and has been gathering dust for the past decade. How do we value this for inventory purposes? Let’s say that the car didn’t cost you anything other than the bill that the customer didn’t pay. It was abandoned, so the only expense was getting the title moved into your name. So, the whole non-running car cost you between legal and title maybe $750. What’s the carburetor worth if you took that out and 25 other parts along with it?
But let’s say that all of a sudden someone from Nowhere-ville Montana sends you an e-mail and is in desperate need of this part. All of a sudden its worth plenty. So what is this inventory item actually worth?
As highly recommended CPA’s and EA’s in the Chicagoland Area that specialize in auto related businesses, we have developed several solutions for this problem.Call Chris Amundson at (773) 267-7500 today. If you get audited, and your inventory is off, you could be liable for extreme amounts of tax, interest, and penalties.
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Chris Amundson is the President of Accounting Solutions Ltd., a full service public accounting firm of Certified Public Accountants and Enrolled Agents handling the bookkeeping, accounting, tax preparation, and audit representation needs of Businesses, Estates, Trusts, and Upper Income Individuals.