We acquire used lawn mowers, clean them, fix them and resell them. I'm not sure how to enter all of this in the books. How is it logged in when first acquired? While fixing them, how do I post the purchase of parts for the lawn mowers? Then How do I move them into inventory for resale after fixed?

This is a very good question and I am glad you came here to ask it. First off you will need several different inventory accounts. One for the lawn mowers before they are fixed up call it something like (Inventory – Work in progress) one for the parts you buy to fix up the mowers (Inventory – Parts) and one for the mowers when you are done with them and they are ready for sale (Inventory – Finished Goods). Those account names are just examples you can rename them as you see fit just make sure they make sense to you or anyone else who might later do your books.

Now when buying the used mowers (that still need to be fixed) you would Debt Inventory – work in progress and credit either cash or accounts payable. Purchasing of the parts used would be the same but substitute the other inventory account (parts).

Now as far as posting the parts to the mowers how are you going to go about doing this and/or what type of accounting/inventory tracking software are you going to use? The J/E would be Cr Inventory Parts Db inventory work in progress. But if your system allows it you want it to capture this information for each individual mower you fix up. The accounting books won't capture that level of detail but other kinds of software will. This way you know the profit or loss on each individual mower you sell.

When the mower is finally done you would credit inventory – work in progress and debt finished goods inventory. But again if your system allows it you want to track each individual mower by a unit number or some identifiable means. Also when posting parts you want your system to track each the parts as they are used on each individual unit number. For the accounting books as a whole this isn't important but to the business this is critical.

Let me know if you have any further questions and I will be glad to help.