Re: Accounting Fees

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In Reply to: Re: Accounting Fees posted by Mark on April 03, 2000 at 23:50:32:

: : I'm not sure of the correct method to enter the following transaction and end up with the correct adjusted cost base:
: : This is a first time purchase of this no-load mutual fund.
: : It has a one-time account opening fee of $40.00
: : Total investment, including one-time fee is $5000.00
: : Share price $15.79
: : Total shares received 314.1229

: : Please comment.

: : Regards,
: : Clive

: Hi Clive,
: You could choose to enter this account fee as a commission fee on
: this initial purchase, or you could enter it as a separate transaction.

: case 1:
: buy transaction for 314.1229 shares at 15.79 for $4960, and a commission fee of $40.

: case 2:
: buy transaction for 314.1229 shares at 15.79 for $4960.
: and
: account fee transaction (non-reinvested) for -$40.

:
: Either case will be accurate, and give you the correct cost basis.
: Note the rounding errors here, you should record the value/shares accurately,
: and let the share price "float". See "Recording Transactions Without Rounding
: Errors" in the online help.

: Thanks,
: Mark
: --
: Mark Beiley
:
: Fund Manager for Windows 3.1x/95/98/NT
:
:

Hi Mark,

I tried both of your suggested methods, however I get different cost basis values.

Case 1: I get a cost basis of $5,000

Case 2: I get a cost basis of $4,960

I think the correct cost basis calculation is $5,000 which includes the accounting fee. But for some reason the case 2 method does not include the accounting fee in the cost basis calculation.

Please comment on this.

Best regards,
Clive

Replies:

• Re: Accounting Fees Mark 21:52:48 04/04/00 (3)
  • Re: Accounting Fees Clive 11:42:56 04/05/00 (2)
    • Re: Accounting Fees Mark 08:46:17 04/06/00 (1)
      • Re: Accounting Fees Clive 14:28:26 04/06/00 (0)