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# Re: Accounting Fees

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Posted by Clive on April 05, 2000 at 11:42:56:

In Reply to: Re: Accounting Fees posted by Mark on April 04, 2000 at 21:52:48:

: : : : 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

: : : 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

: Hi Clive,
: Actually, you've pointed out a bug. Normally, account fees are added
: into your cost basis. With this bug, an account fee recorded on
: the same date as your very first investment, is not accounted for in the
: basis. We will fix this in the next release. You can use case 1 above
: for now. You can experiment with case 2, by putting the account fee for
: 1 or more days later than the original investment.

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

Hi Mark,