Trial balance failure after stock split

[Doug Laidlaw]

On Mon, 18 Jun 2007 09:09:25 pm Fred Bone wrote:
> I'm probably doing something wrong, but cannot see what. I used the
> "Stock Split Druid" to record a consolidation, and it resulted in a
> mismatch when I do a Trial balance.
>
> Using v2.1.3 for Windows.
>
> I started with 731 shares bought for 487.80.
>
> The company did a "Share Consolidation", one for three with a cash
> distribution of 146.60 (this was via an issue-and-redemption of "B"
> shares, but that's a technicality). I ended up with 244 shares.
>
> In the Druid, I entered:
>  (Stock Split Details)  Shares:  244-731
>  (Cash In Lieu)         Amount:  146.20
> chose suitable accounts for the cash-in-lieu and left everything else
> alone.
>
> The transaction shows in the stock register as
>  Num     Description                    Tot Shares   Tot Buy   Tot Sell
>          Stock Split                          -487                  487
>  Split                  Assets:<>:PON         -487
>          Cash In Lieu   Assets:<>:Cash                146.20
>          Cash In Lieu   Income:<>:PON                            146.20
>
> The net result in Trial Balance is that the value shown against the
> relevant stock has reduced from 487.80 to 97.72, with the two other
> accounts each increasing by the expected 146.20, for a net discrepancy in
> the final totals of 487.80-97.72=390.08.
>
> Everything else (that I've thought to check) looks correct.
>
> What should I have done differently?
>
> Where does it get that 97.72 figure from???
>
> _______________________________________________
> gnucash-user mailing list
> gnucash-user at gnucash.org
> https://lists.gnucash.org/mailman/listinfo/gnucash-user
> -----
> Please remember to CC this list on all your replies.
> You can do this by using Reply-To-List or Reply-All.

Are you saying that you bought a bundle of 731 shares for $487.80?  So the 
cost of each share was $487.80/731 or 66.73 cents a share.  You disposed of 
487 shares and received $146.20, so the cost of the 244 shares you now hold 
was (notionally) 487*$0.6673 less cash $146.20 = $178.77, or 73.2 cents a 
share.  To my thinking, that should be the value of the stock.

The cash in lieu went to Cash and Income;  it won't affect the value of the 
shares if you did it that way.  In my calculation, it is debited to Cash 
(Increase) and credited to PON (asset reduced.)

More than that, I can't say.  I don't buy and sell shares, and have no 
experience of Gnucash's druid.

Gnucash won't leave the books unbalanced.  The $390.08 will have to have a 
matching entry, even if it is in Capital or another Equity account.

HTH,

Doug.

-- 
The art of being wise is the art of knowing what to overlook.
   - William James.