Next [was Re: Stock trades and realized gains/losses]

[Derek Atkins]

Glen Ditchfield <gjditchfield@acm.org> writes:

> Shouldn't the adjusting transaction move money from a realized gain account to 
> the ultimate destination account?  I thought stock sales would work like 
> this:
> - Buy 1 share of RHAT for $5, and record it in the stock account.
> - Sell 1 share of RHAT for $9 cash.  The transaction would have splits showing
>   * one share of RHAT sold from the stock account for $5 (the purchase price)
>   * $4 credited (debited? whichever) from a realized gain account
>   * $9 deposited in the "cash" account.

No, it doesn't work this way, because you need to keep track of the fact that
you sold the share at $9.  Where is that recorded in your above list of splits?

> All transactions involving a lot would use the same price.  The GUI should 
> support sales by having the user pick a realized gain account, and by 
> automatically subtracting the purchase price from the sale price.

That doesn't work, because you may SELL shares of a lot at different
prices over time.  For example, you may:

Buy     10      $10/each
Sell    5       $15/each
Sell    3       $10/each
Sell    2       $5/each

All of these transactions would be part of ONE LOT!  Therefore, you MUST
keep track of each individual sale.

-derek

-- 
       Derek Atkins, SB '93 MIT EE, SM '95 MIT Media Laboratory
       Member, MIT Student Information Processing Board  (SIPB)
       URL: http://web.mit.edu/warlord/    PP-ASEL-IA     N1NWH
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