Thanks, Linda.  This seems to be the concensus and makes a lot more sense 
than what I was thinking!

Carolyn Schindewolf
----- Original Message ----- 
From: <[log in to unmask]>
To: <[log in to unmask]>
Sent: Saturday, May 05, 2007 12:01 AM
Subject: Re: COGS and pump rentals


> DISCLAIMER:
>
> I am NOT an accountant or tax expert.  I did run two rather large,
> non-hospital affiliated breastfeeding clinic/retail establishments between
> 1992 and 2005.  I did my own taxes until 2004 when I incorporated the
> business and the tax paperwork became overwhelming.  PLEASE talk to an
> expert before filing your taxes.  I am also answering based on what I know
> of the US rules at the time I was running the business.
>
>
> COGS - Cost of Goods Sold is the money it takes to obtain a product that 
> is
> sold.  In the case of pumps, you are selling the service of the pump.  If
> you rent the pump from one of the manufacturers, the COGS is the lease and
> insurance payments.  If you purchase a pump and rent it though, there is 
> no
> COGS.  The costs are treated as capital equipment and must be depreciated
> based on the expected life of the machine.  The IRS has guidelines on how
> long something must be depreciated.
>
> llp
>
> Linda L Pohl, IBCLC, RLC
> [log in to unmask]
> Phoenix (AZ, USA), Washington DC (USA), Chennai (India)
> Read my adventures at www.PohlHome.com
>
>
> -----Original Message-----
> From: Lactation Information and Discussion
> [mailto:[log in to unmask]] On Behalf Of Carolyn Schindewolf
> Sent: Friday, May 04, 2007 10:10 PM
> To: [log in to unmask]
> Subject: COGS and pump rentals
>
> Does anyone know how to calculate COGS when applied to pump rentals rather
> than one time sold inventory?
>
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