How To Write Off Cost Of Goods Sold. The sales revenue and cost of goods sold. Calculate cogs by adding the cost of inventory at the beginning of the year to purchases made throughout the year.

The problem is assigning a value to the cost of goods sold since your product levels are in a constant state of flux. Cost of goods sold is the total of all costs used to create a product or service, which has been sold. It's also an important part of the information the company must report on its tax return.