Marking up merchandise

[J. R. White]

Your statement is correct, as far as it goes.  Cash accounting includes both
accounts receivable and accounts payable.  The question is "How do you show
your markup on parts (inventory)?"  That's the first question an auditor
would ask.  Just be ready with an answer, if the time comes; and, calculate
your markup consistently.
J R W

-----Original Message-----
From: pianotech-bounces@ptg.org [mailto:pianotech-bounces@ptg.org] On Behalf
Of Alan Barnard
Sent: Monday, November 14, 2005 10:01 PM
To: Pianotech
Subject: Re: Marking up merchandise

In a strictly cash-based accounting system (no accounts receivable or
payable, etc.), my understanding -- and certain hope -- is that you can
just show your purchases as expenses, as well as shipping, etc., and your
parts sales as receipts. Anything but REALLY SIMPLE in the bookkeeping and
office management department will quickly, as you said, drive me nuts. If
I'm all wet, tell me gently; I frighten easily when it comes to all things
accounting-taxes-IRS. 

Thank the kind Lord for Quicken and Turbo-Tax!

Alan Barnard
Salem, Missouri


> [Original Message]
> From: Ross White <jrwhiteltd@msn.com>
> To: <pianotech@ptg.org>
> Date: 11/14/2005 10:22:27 PM
> Subject: Re: Marking up merchandise
>
> Traditional practice in the retail industry is to show wholesale, 
> distribution, storage, other marginal costs and markup (or profit-margin)
as 
> a percentage of retail.  If you try to track these amounts in any other
way, 
> you'll go nuts, especially if the I R S ever asks you to explain.
> J R W
>
>
> >From: Nichols <nicho@zianet.com>
> >Reply-To: Pianotech <pianotech@ptg.org>
> >To: Pianotech <pianotech@ptg.org>
> >Subject: Re: Marking up merchandise
> >Date: Mon, 14 Nov 2005 15:22:38 -0700
> >
> >At 05:47 PM 11/14/2005 -0400, you wrote:
> >>I think we have to determine, if the mark-up, is based on the selling 
> >>price, or the product price.
> >>50% of the selling price, is the same as 100%, of the buying price.
> >>Or am I wrong?
> >>John M. Ross
> >
> >Markup and profit margin are different. A framastat that costs one
dollar 
> >can sell for two dollars due to a 50% profit margin or 100% markup. In 
> >other words, a selling price based on a percentage of the cost, added to 
> >the cost, is markup. A selling price with a gross profit margin of 50 
> >points has a cost of about half of the selling price. Ironically, sales 
> >people often call the profit margin "the mark", as in "50 mark". Many
still 
> >use profit wheels, like slide rules, and most financial calculators have
pm 
> >built in. Added to this can be what's called "pack", which for larger
items 
> >will include shipping, prep, delivery, four in-home tunings, first two 
> >years regulation, etc. Added to the cost, to keep the mark happy.
> >
> >Clear as mud, no?
> >
> >Guy
> >
> >
> >
> >
> >
> >               "Not everything that counts can be counted,
> >                and not everything that can be counted counts."
> >                                                           Albert
Einstein
> >
> >_______________________________________________
> >pianotech list info: https://www.moypiano.com/resources/#archives
>
>
> _______________________________________________
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