Issue/Symptom/Question

If the warehouse was setup accidentally as taxable when it should not have been and items were transferred into the warehouse from an Account, how can I fix the standard cost (means unit cost and not PENTA Standard Costing) so that tax is not included?

Applies To

• PENTA for Windows > Inventory > Warehouse Transactions > Material Transfer
• PENTA for Windows > Inventory > Setup > Warehouse Information
• Incorrect Warehouse Tax Setup

Resolution/Fix/Answer

If items were transferred into a warehouse and the incorrect unit cost gets associated with the items in the warehouse, the best thing to do is reverse out the inventory and set the balance to $0.00.  Once the balance is zero, the items can be transferred in with the correct unit cost.

If the situation is like the above, make sure to correct the setup items after making the balance $0.00 for the items.  For example, making the warehouse tax exempt and then transferring in the items again.  The entries to transfer out to get to zero should follow the setup that was used when the items were brought into the warehouse.

High level steps:

1. Transfer out all units for products that have incorrect unit costs so the balance becomes zero for the product
   1. The FROM is the Warehouse and Location, and the TO is a non-edit rule Account  (typically an Inventory Adj Expense Account)
2. Make corrections to setup, if necessary
3. Transfer back the units with the correct/desired unit cost per unit
   1. The FROM is the non-edit rule Account and the TO is the Warehouse and Location
4. The difference stays in the non-edit rule Account and will be cleared through Retained Earnings when the Fiscal Year is closed

PENTA uses weighted average unit cost, so trying to adjust the unit cost by transferring in units with odd unit costs can be done to change the unit cost per unit.  However, the easiest way to conceptualize the correction is to zero out and transfer in again with correct unit cost.