Creating the Inventory List Check with the probate court to find out whether a specific form for inventory is required in your area – this typically makes creating the list much easier. Otherwise, you’ll have to create your own. Each asset must be described in detail, giving identifying account numbers or legal descriptions from deeds.
Of cause, the company still performs the physical count of inventory sometimes for the control purpose. Under the periodic system, the company makes only one journal entry for inventory sale by debiting accounts receivable or cash account and crediting the sales revenue account.
This inventory can also include a listing of the person’s liabilities or debts. In terms of assets, items that would need to be added to an estate inventory include:
They can vary – sometimes considerably – from jurisdiction to jurisdiction, particularly when it comes to filing the estate’s inventory with the court. Although the basics are often the same, the details can be different. The deadline by which you must file the estate’s inventory usually comes up relatively early in probate proceedings.
In Ohio, the deadline is three months after your official appointment, and in Virginia, it’s four months , but the court may give you an extension if the estate is particularly complex or if there are other complications.
If you’ve been asked to serve as executor of someone’s estate, your first move might be to consult with a local attorney and get a firm grasp of the laws in your state. They can vary – sometimes considerably – from jurisdiction to jurisdiction, particularly when it comes to filing the estate’s inventory with the court.
Normally, you would use fair market value for these things – what they would reasonably sell for in used condition on the current market. You can check internet sales sites, such as eBay, to get an idea of how much someone would be willing to pay for them. If your state requires you to include debts in your inventory, you would typically use the balance owed as of the date of death.
You must also typically list cash, even if it’s outstanding – someone owed it to the decedent before his death but never got around to paying him. In some states, your search will extend to the decedent's debts – you'll have to list these in the inventory as well.
In some states, you might only have to concern yourself with the decedent’s probate assets – those that require court supervision to transfer to a beneficiary. These generally would not include assets the decedent placed in trust or held jointly with someone else with rights of survivorship. They would not include assets with beneficiary designations, such as life insurance or retirement benefits, unless the named beneficiary is the decedent’s estate.
You may also have to separately list all items of property worth more than a certain dollar value. For example, in Virginia, every item worth $500 or more must be listed. If something is clearly part of a collection, however, you may be able to list it as such. When you’ve completed the inventory, have a lawyer look it over – the estate would normally pay for this service as well.
Each asset must be described in detail, giving identifying account numbers or legal descriptions from deeds. Although you don’t have to list every plate the decedent owned – you can usually list such property as household items – some states require that if an item is bequeathed to a certain individual, it must be listed separately.
The first entry is to recognize the sale revenue that the company makes by debiting accounts receivable or cash and crediting sales revenue account. Another journal entry is to recognize the cost of goods sold as a result of sale by debiting the cost of goods sold account and crediting the inventory account.
Under the periodic system, the company makes only one journal entry for inventory sale by debiting accounts receivable or cash account and crediting the sales revenue account.
Another journal entry is to recognize the cost of goods sold as a result of sale by debiting the cost of goods sold account and crediting the inventory account. In this journal entry, the company records the cost of goods sold as well as updates the inventory balances on the date of inventory sale.
Perpetual inventory system and period inventory system are the two methods of accounting for inventory that is different from one to another. Likewise, the inventory sale journal entry will be different if one company follows the perpetual system while another company follows the periodic system. This is due to under the perpetual system, ...
Under the perpetual system, the company ABC Ltd. can make the journal entry for inventory sale on October 15, 2020, as below: In this journal entry, the company deducts $1,300 from the inventory balances and recognizes it as the cost of goods sold immediately after making sale on October 15, 2020.
If ABC Ltd. uses the periodic inventory system instead, it will only make a journal entry for sales revenue and accounts receivable on October 15, 2020, as below: Account. Debit.
Likewise, there is no update to the figures of the cost of goods sold and inventory on October 15, 2020. So, if the company checks the inventory account or cost of goods sold after making the sale of $2,000, it will still show the old figures of the previous period.
After the inventory is presented to the probate court and the inventory fee is determined, then it must be served upon the interested persons as defined under the Michigan Court Rules. That
Unless court ordered or if the estate is supervised the Inventory is not filed. That’s an important consideration because the idea in the State of Michigan is that unless it’s a supervised administration, the inventory – and the assets you have identified within it – are kept private among those who are interested in the estate.