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Looking for a bit of spreadsheet help
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Herpius Derpiar
The Scope
Gallente Federation
#1 - 2012-09-27 23:19:24 UTC
Alright, so I started taking an accounting class at a local community college, and I was looking for a way to practice double entry / statements / adjustments / all of that fun stuff outside of class, which made me think of EVE trading. I've downloaded a template pre-loaded with a chart of accounts, a journal with debit / credit and a balance calc at the top, along with a few other reports generated from the journal.

Anyways, I start with an initial investment of 800m, get some ships I'm going to be using and place their values into the "equipment" asset, make some trades and place the fees in expenses. What I'm stuck on is inventory.

I'm mixing station flipping with regional trading and have no idea where to put sales. I've been transferring from cash to inventory for every transaction, but when you sell it, you would debit cash and credit inventory, but where would revenue come in? There's gotta be another credit somewhere that I'm missing, or I'm doing inventory wrong completely.

So to give a different scenario - I'm running a store. I buy products from someone else, credit cash and debit inventory. I make a sale and debit cash and credit inventory. If I use the sale price of the product to credit, then I'm overcrediting my inventory and it'll eventually go negative when everything is sold.

Anyone out there want to enlighten me as to what I'm doing wrong?
Clystan
Binaerie Heavy Industries
#2 - 2012-09-27 23:35:57 UTC
Herpius Derpiar
The Scope
Gallente Federation
#3 - 2012-09-27 23:48:32 UTC
From reading those descriptions, it looks like I'm using a perpetual system.

I'm still pretty new to this, about a month into my class, but I'm liking it a lot more than I thought I would.
Huttan Funaila
Caldari Provisions
Caldari State
#4 - 2012-09-28 06:14:51 UTC
I'm currently taking a cost accounting course (among other accounting courses) and some of the tables/charts/spreads on the industrialist blogs look just like some of the charts and assignments in my textbook. I personally don't intend to be making capital ships anytime this year, so I can avoid the math involved. But I do appreciate being able to map some of what I'm learning in class onto Eve; it makes the homework a lot closer to home.

Samples:
http://eveblog.allumis.co.uk/
http://k162space.com/
DuBios
Wolf Investments
#5 - 2012-11-07 00:21:11 UTC
im no accountant, but seems to me that you have your statements backwards,

Quote:

...but when you sell it, you would debit cash and credit inventory,...

... I buy products from someone else, credit cash and debit inventory...



to me, it should be just the opposite, if you sell something, you'll be adding to your isk and subtracting your inventory. If you buy something, you'll be adding to your inventory and subtracting from your isk..
MailDeadDrop
Archon Industries
#6 - 2012-11-07 05:14:19 UTC  |  Edited by: MailDeadDrop
DuBios wrote:
im no accountant, but seems to me that you have your statements backwards,

Quote:

...but when you sell it, you would debit cash and credit inventory,...

... I buy products from someone else, credit cash and debit inventory...



to me, it should be just the opposite, if you sell something, you'll be adding to your isk and subtracting your inventory. If you buy something, you'll be adding to your inventory and subtracting from your isk..

DuBois is correct. It has to do with the particular terminology for accounting.

If you debit an asset account, you increase its balance; crediting decreases its balance. So "debiting the cash account" increases it (since cash is an asset), while crediting inventory decreases its balance.

For liability accounts, debits and credits work the opposite way. DuBois doesn't mention any liability accounts, but common ones are loans, and owner's/shareholder's equity.

MDD
MailDeadDrop
Archon Industries
#7 - 2012-11-07 05:21:59 UTC
Herpius Derpiar wrote:
I'm mixing station flipping with regional trading and have no idea where to put sales. I've been transferring from cash to inventory for every transaction, but when you sell it, you would debit cash and credit inventory, but where would revenue come in? There's gotta be another credit somewhere that I'm missing, or I'm doing inventory wrong completely.
Anyone out there want to enlighten me as to what I'm doing wrong?

Sales:
  1. Debit cash account for the gross proceeds
  2. Credit cash account for the sales taxes and broker fees
  3. Debit taxes and fees accounts for the sales taxes and broker fees
  4. Credit inventory for the "sold asset's value" (this will prevent inventory value creep which you cited above)
  5. Net profit (gross sales less fees less asset value) goes into the income statement somehow (but I forget the details)

#2 and #3 balance each other. #1 is balanced by #4 and #5 together.

MDD
Oska Rus
Free Ice Cream People
#8 - 2012-11-07 16:39:39 UTC
Speaking about single station trading:

I do not understand much about accounting terminology (credit/debit). But i track my trading proffits simply by suming price of my sell orders, isk in escrow, isk in wallet and eve estimated price of inventory.

I try to have my inventory empty at the end of each trading session because its price differs by few to few tens of percent from actual market prices i sell and buy goods for.
Orind
Browncoats
#9 - 2012-11-08 04:38:52 UTC  |  Edited by: Orind
When you make a sale the cash from the sale gets balanced against your inventory like you said and the profit goes into the equity account. So you would decrease your inventory assets by their original value and increase your cash asset by the amount of the sale. The profit then is added to the equity account to make everything balance.
Assets=Liabilities+Equity
Srioghal moDhream
Perkone
Caldari State
#10 - 2012-11-08 21:14:17 UTC  |  Edited by: Srioghal moDhream
Here is how you would do it

Purchase a ship for inventory


Inventory DR 100m
Cash CR 100m

Sell the ship for 110m

Cash DR 110m
Sales CR 110m

COGS DR 100m
Inventory CR 100m

There ya go. COGS - Cost of goods sold. You use this later against your sales to determine Gross Margin.


edit- add in expense accounts and what not as required (and stated above), mine is the very simplified version.