Hi
Would appreciate if someone could just verify my small transactions below.
Bought Degas for $100,000
Estimated it is currently worth $130,000, and we sold it...
How to record the actuall value...
/Bengt
2. Under estimation of unrealized gain.
You were over-optimistic about the value of the painting. Instead of the
$130000 you thought the painting was worth are only offered $120000. But
you still decide to sell, because you value $120000 more than you
value the
painting. The numbers change a little bit, but not too dramatically.
The transactions should now appear as follows (observe the last
transaction
which balances the Unrealized Gains accounts):
Table 9.2. Turning an Accrued Gain into a Realized Gain
>From To Amount Remaining
Income:Unrealized Income:Realized $20,000 $10,000
Assets:Degas:Cost Assets:Bank $100,000 $0
Assets:Degas:Unrealized Assets:Bank $20,000 $10,000
Assets:Degas:Unrealized Income:Unrealized $10,000 $0
This leaves the "Asset:Fixed Assets:Savings Account" account with a total
of $120000 and "Income:Realized Gains" with a total of $20000.
3. Over estimation of unrealized gain.
You manage to sell your painting for more than you thought in your
wildest
dreams ($150,000). The extra value is, again, recorded as a gain, i.e. an
income.
The transactions should now appear as follows (observe the last
transaction
which balances the Unrealized Gains accounts):
Table 9.3. Turning an Accrued Gain into a Realized Gain
>From To Amount Remaining
Income:Unrealized Income:Realized $50,000 ($20,000)
Assets:Degas:Cost Assets:Bank $100,000 $0
Assets:Degas:Unrealized Assets:Bank $50,000 ($20,000)
Income:Unrealized Assets:Degas:Unrealized $20,000 $0
This leaves the "Asset:Fixed Assets:Savings Account" account with a total
of $150,000 and "Income:Realized Gains" with a total of $50,000.
--
Bengt Thuree [EMAIL PROTECTED]
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