Currently we are facing two issues and we want you to help us.
The first issue is:
One of our employees have received a part at a wrong value and have cleared its ledger also. When I tried to correct that value, it has turned balance sheet into negative. Please suggest me how can I remove the effect on balance sheet.
Another issue is that:
Our employees have received a part at a wrong value in CETEC. For example, If ten parts were purchased @5 dollar per part, its value must be 50, but due to the mistake of employee, the value has become too huge than actual and our inventory has affected. Now we have don’t done a vendor return option because we have utilized 50 percent of the parts in production which has affected our balance sheet and inventory. So we want remaining 50 percent parts in CETEC as done in actual cost and clear negative impact in balance sheet and inventory. So we want you to suggest how can we rectify the value of remaining 50 percent of stock and replace with actual cost.
Your second question, how to correct the 50% of badly costed inventory you haven’t used… the correct solution is to perform an inventory cost adjustment. Go to the part, scroll down, find the bin/FIFO layer that’s badly costed, and adjust the cost to the correct cost, set an inv adjustment code, and click SET to update it.
Now, for both your first and second questions, the correct solution (to get your balance sheet back in proper valuation) is to perform a manual GL reversing entry. Find the $ amount delta that is bad, and create a manual journal entry to debit/credit the proper amounts to get them back into balance. We would recommend getting this approved by your CPA or accounting specialist of course.
Hope this helps. If you are in need of expert financial forensic accounting or consulting, please contact “firstname.lastname@example.org” to setup a billable ($250/hr USD) consultation.