Ismael, thanks for your write-up.
For me though net gain = income - expenses.
That's why I booked the harvested cabbages as income in term of
commodities, and why not? At the time of selling the ultimate processed
produce we can apply the market price to the remaining commodity (that
which is not consumed in the process).
If you want to apply a price to the cabbages, that would be equal to the
expenses of plowing the land, planting the seeds, putting fertilizer,
harvesting etc.
It's difficult if not impossible to implement the cost of produce like that
in ledger.
That's why we aggregate the expenses so that later we can divide them by
the number of cabbages and calculate their price of production.
Then income - expenses = net gain
Your way of 'finding' the cabbages appears cool to me though.
And maybe accounting-wise more correct, I don't know.
Thanks for your food for thought!
On Tuesday, March 20, 2018 at 12:01:20 PM UTC, Ismaël Bouya wrote:
>
> Hi Ella,
> I think you’re missing something important in your workflow.
>
> Your income should be the net gain: At some point, you bought something
> to start with (or farmed/found them, which should(?) be seen as the same
> as buying them for $0):
>
> 2018/03/21 farm
> inventory:farm 5 cabbage @ $0
> cash
>
> Those cabbage grow into a salad:
>
> 2018/03/21 farm
> inventory:plant 2 salad @ $0
> inventory:farm -5 cabbage {$0} @ $0
>
> And you sell that salad:
>
> 2018/03/21 farm
> cash $4
> inventory:plant -2 salad {$0} @ $0
> income:farm
>
> ------------------
> Now let’s be a little more complete (you’ll adapt it to your need)
>
> You buy 6 cabbage at $1 each
> 2018/03/21 farm
> inventory:farm 6 cabbage @ $1
> cash
>
> Each of your cabbage is priced $1, and you spend $6.
>
> You farm them, you need 2 cabbages to make one salad (I’m not a farmer
> maybe it doesn’t exist :p ), but a pair of them is lost:
>
> 2018/03/21 farm
> inventory:plant 2 salad
> inventory:farm -6 cabbage
> expenses:farm loss 2 cabbage
>
> Then you sell those two salad (each costed 2 cabbages, i.e. $2), at $5
> each:
>
> 2018/03/21 farm
> cash $10
> inventory:plant -2 salad @ $2
> income:farming
>
> You end up with a $6 net income ($10 - $4 cost), and $4 in your pocket
>
> $ ledger bal:
> $4 cash
> $-6 income:farming
> 2 cabbage expenses:farm loss
>
> if you want to track the losses in terms of cash, just add costs ("@")
> in the middle one:
> 2018/03/21 farm
> inventory:plant 2 salad @ $2
> inventory:farm -6 cabbage @ $1
> expenses:farm loss
>
> $ ledger bal:
> $4 cash
> $-6 income:farming
> $2 expenses:farm loss
>
> Hope it helps/answer your questions
> --
> Ismael
>
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