Apply a bead of glue along one side of center piece of wood (Image 1). Quickly spread glue with a fingertip then lay it flat and butt against right-side piece (Image 2). Apply glue to right side of left piece, spread with fingertip and butt against left side of center piece (Image 3). Make sure edges are lined up.
By deducting the value-of-inventory figure, you reduce your taxable income by as much as 88 percent (assuming a 12 percent average markup for inventory). You only pay taxes on your profits. Keeping track of your inventory costs reduces your tax bill by helping you arrive at a profit figure.
Net Realizable Value for Inventory. When a business purchases an inventory item, it records the cost it paid for the item on its balance sheet as the item's historical cost. Inventory items depreciate over time and may not be worth their original price in the future.