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I am using Kashoo for my accounting software to record my computer business.
I sell computers as part of the services, but this is the question on what do I need to do to record it correctly.
we buy computers from retailers for a discounted price and we charge the customer the same price, but we add our service cost.
Example, We buy the computer for
$ 423 from the retailer after tax
We charge $ 50 for setup, configuration and installing virus protection + Delivery
How can we record this transaction in a way that at the end of the year we are not paying income tax on $ 473 dollars, but instead for only $ 50 dollars.
Also how can we see it on the software where it shows the whole amount as profit where it is not.
We want the invoice to look Professional and we will have a better and accurate picture of income
Do we have to do that for every item
Answer by RUSerious
Income = $ 473
Expenses = $ 423
Net Income = $ 50
This is how you will show it on Schedule C.
you record your purchase of $ 423 which is included in your cost of goods
you record your total invoice(including the $ 423) and when you complete your Sch C, your $ 423 is reported there as cost of goods and reduces your gross income