This is really great information. Thank you all for contributing. I'm hoping someone can clarify some specific situations related to this topic. I think this was hit in a more general (and regulatory) sense but I want to make sure I’m doing it correctly.
From what’s been already stated, here is how I think I would record blending of spirits currently in storage:
Receive bulk spirits into Processing - line 2 Received.
Do my blending/flavoring steps
If I bottle, they go OUT of bulk on Part I line 9, IN on Part II line 28 Bottled or Packaged in Col (b)-BOTTLED
If I barrel them for further aging, they go OUT of Part I on line 9 and IN on Part II on line 28 Bottled or Packaged on Col (c)-PACKAGED
The barreled spirits then sit “on-hand” as barreled spirits on Part II col(c) - Packaged
When I dump blended barrels to finish and bottle: they move out of Part II col(c) on line 40 and into Part I line 6 - Dumped for further processing. Back to step 3 to finish/bottle.
Would Processing Part II(c)-Packaged generally only be barreled items waiting for further processing or bottling? (if you only sell bottles)
Seems kind of confusing if your barrels are in both storage and processing.
Can one of the experts confirm if this is correct?