Accounting question involving resale for profit

[Maf. King]

On Thursday 04 Aug 2005 14:32, Thomas John Vitolo wrote:
> Quick accounting question that I can't quite get my head around:
>
> 1/1/04  Purchased a book of 10 sporting event tickets, face valued at $20
> each. $1000.
> 2/1/04  Agreed to sell 2 tickets (valued at $40) for $60.
> 3/1/04  Agreed to sell 2 tickets (valued at $40) for $70.
> 4/1/04  Received $60 payment.
> 5/1/04  Received $70 payment.
> 6/1/04  Personally used 2 tickets
> 7/1/04  Personally used 2 tickets
> 8/1/04  Personally used 2 tickets
>
> So, there's a number of funny splits here.  At the end of the day, I've:
> spent $120 in expenses:entertainment
> spent $80 in some sort of business investment
> received $130 for that investment, resulting in $50 income?
>
> I want to make sure I set up the accounts:receivable correctly, as well as
> the personal expenses, income, etc.
>
> How to do this correctly from an accounting & gnucash point of view?
>

Hi,

I think that the GAAP way to do it is to have an expense:COGS (Cost Of Goods 
Sold)  account.

But I am _very_ hazy on the exact details of this.  It has come up on the list 
a couple of times, and those threads taught me the little bit I know.  

Have a look for "COGS" in the archives - especially around 09/11/2004, 
13/02/2005, 23/3/05

Cheers,
Maf.


>
> Thanks!
>  - stomv
>
>