Where to Enter Cost of Goods Sold in Lacerte
Form 1125-A is entered on screen 14 in the 1120 and 1120S modules and on screen 11 in the 1065 module. Balance sheet inventory flows automatically from the cost of goods sold entries, so only use the Inventories field on the balance sheet screen when the balance sheet figure genuinely differs, otherwise the return reports two different inventory numbers.
- Detail
- Screen 14 (1120 and 1120S) / 11 (1065)
- Cost of Goods Sold (1125-A)
| Trial balance account | Lacerte screen and field | Lands on |
|---|---|---|
| Beginning inventory | Cost of goods sold screen | Form 1125-A line 1 |
| Purchases | Cost of goods sold screen | Form 1125-A line 2 |
| Cost of labor | Cost of goods sold screen, production labor only | Form 1125-A line 3 |
| Section 263A costs | Cost of goods sold screen | Form 1125-A line 4 |
| Ending inventory | Cost of goods sold screen | Form 1125-A line 7, and Schedule L automatically |
| Production depreciation | Depreciation screen, select the 1125-A form option | Form 1125-A other costs |
| Balance sheet inventory, if different | Balance sheet screen, Inventories if different from COGS | Schedule L line 3 |
| Inventory method | Inventory Information (Form 1125-A) section | Form 1125-A lines 9a to 9f |
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Try it freeWhere to Enter Cost of Goods Sold in Lacerte on a trial balance
| Acct # | Account | Debit | Credit |
|---|---|---|---|
| 1000 | Cash | 42,800.00 | |
| 1200 | Accounts receivable | 68,500.00 | |
| 1300 | Inventory (the account this page is about) | 55,000.00 | |
| 1500 | Equipment | 145,000.00 | |
| 1510 | Accumulated depreciation | 47,500.00 | |
| 2000 | Accounts payable | 28,400.00 | |
| 2100 | Accrued expenses | 9,200.00 | |
| 2400 | Notes payable | 92,000.00 | |
| 2450 | Due to shareholder | 15,000.00 | |
| 3000 | Common stock | 10,000.00 | |
| 3900 | Retained earnings | 86,300.00 | |
| 3950 | Shareholder distributions | 52,000.00 | |
| 4000 | Gross receipts | 612,000.00 | |
| 5000 | Cost of goods sold | 318,000.00 | |
| 6000 | Salaries and wages | 88,000.00 | |
| 6050 | Officer compensation | 72,000.00 | |
| 6300 | Depreciation expense | 21,500.00 | |
| 6900 | Other operating expenses | 37,600.00 | |
| Total | 900,400.00 | 900,400.00 |
Example journal entries
| Account | Debit | Credit |
|---|---|---|
| Cost of goods sold | 24,000.00 | |
| Inventory | 24,000.00 |
| Account | Debit | Credit |
|---|---|---|
| Cost of goods sold | 318,000.00 | |
| Purchases | 310,000.00 | |
| Inventory | 8,000.00 |
One screen, several trial balance accounts
Cost of goods sold on page 1 is not a single account mapped to a single field. It is the output of Form 1125-A, which wants beginning inventory, purchases, cost of labor, additional section 263A costs, other costs and ending inventory.
So the mapping job is to split the client's accounts across those lines, and the split is not always obvious. Freight in belongs in the computation rather than in a separate shipping expense. Production labor belongs in cost of labor rather than in wages on page 1.
Let inventory flow, do not enter it twice
Lacerte carries the inventory figures from the cost of goods sold screen to the balance sheet automatically. The balance sheet screen has an Inventories field described as for use when it differs from cost of goods sold, and that field is a trap: an amount there competes with the figure the 1125-A produced.
When the two disagree, Lacerte raises a diagnostic saying the ending inventory in cost of goods sold differs from the balance sheet. The fix is almost always to clear the balance sheet entry rather than to adjust the 1125-A, because the inventory on the balance sheet and the ending inventory in the computation are the same asset at the same date.
Production labor cannot be in two places
This is the double deduction that costs the most on a manufacturing return. Factory wages belong in cost of labor on Form 1125-A. Office and administrative pay belongs in salaries and wages on page 1.
A client whose entire payroll runs through one account needs the split made before the return is prepared, and it needs to be the same split next year.
Depreciation on production assets
Current year depreciation can be routed to Form 1125-A from the depreciation screen by selecting the 1125-A form option on the asset. That is the right way to do it, because the asset module still computes the deduction.
The alternative, a depreciation override field on the cost of goods sold screen, requires preparing and attaching Form 4562 manually for the amounts entered there, which is rarely worth it.
Service businesses
A business with no inventory generally has no cost of goods sold, and Form 1125-A is built around inventory questions a service business cannot answer sensibly. Many bookkeeping systems create the account anyway. Knowing which situation you are in before completing the screen saves answering questions that should not be asked.
Tax return treatment
| Form | Line |
|---|---|
| Form 1120 | Form 1125-A, carried to page 1 line 2 |
| Form 1120S | Form 1125-A, carried to page 1 line 2 |
| Form 1065 | Form 1125-A, carried to page 1 line 2 |
Common questions
What screen is cost of goods sold in Lacerte?
Screen 14 in the 1120 and 1120S modules and screen 11 in the 1065 module. Intuit articles have shown different numbers across versions, so confirm against the screen list in your copy.
Do I need to enter inventory on the balance sheet as well?
No. Inventory flows to Schedule L from the cost of goods sold entries automatically. The Inventories field on the balance sheet screen is only for a figure that genuinely differs, and an unnecessary entry there produces a diagnostic about ending inventory disagreeing with the balance sheet.
Where does production labor go?
In cost of labor on Form 1125-A, not in salaries and wages on page 1. Reporting the same payroll in both places deducts it twice, which is the most common double deduction on a manufacturing return.
How do I get depreciation into cost of goods sold?
On the depreciation screen, select the 1125-A form option for the asset so the computed depreciation is routed there. The override field on the cost of goods sold screen works but requires preparing and attaching Form 4562 manually.
Related answers
Go deeper
This page is the short answer. These articles work through the same ground in detail.
Last reviewed October 18, 2026.