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How Do I Record different stock activities?
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How Do I Record different stock activities?

By: Steve Nelson

How do I record a stock split?

A stock split typically occurs when a company adjusts the number of shares to reduce their price. For example, a company might say that for each share now owned, on some specified future date shareholders would receive two new shares. A two-for-one split (or any other sort of split) doesn’t affect the value of your investment. It only affects the number of shares you own.
To record a stock split, take the following steps:

1. Display the investment account with the stock you want to split.
Click the Accounts & Bills link, and then select Account List so that Money dis-
plays the Pick An Account To Use window. Then click the investment account.
Money displays the investment account register.

2. Indicate that you want to record a stock split.
Click More Investing in the list of common tasks, and then choose Record A Special Activity from the submenu. Choose Record A Split from the next submenu, and Money displays the Split Shares dialog box.

3. Describe the split.

To describe the split, select the investment from the Investment list box. Then enter the split date in the Date box. Finally, describe the ratio of new shares for old shares using the Split The Shares boxes.
NOTE The number of new shares goes in the box on the left. The number of old shares goes in the box on the right.

How do I record a dividend paid in stock?

When a company pays in stock rather than cash you receive what’s known as a stock dividend. In effect, a stock dividend is an accounting gimmick.Companies, so the cynics say, use stock dividends when they don’t have the money to pay a cash dividend. Stock dividends don’t require difficult record keeping. To record a stock dividend, simply record a stock split. For example, if a company issues a 10 percent stock dividend in which they are giving you 1/10th of a share for each share you already own, then enter the ratio as 1.1 new shares for each one old share.

How do I set up employee stock option investments?
Money lets you set up employee stock option plan grants as investments. In order to do this, you simply set up an account to track the value of the employee stock option plan. However, when Money displays the New Account dialog box asking what account you want to set up, indicate that you are setting up an account to track employee stock options rather than general investments. The instructions are selfexplanatory from this point on.

How do I handle a merger?

If a company in which you own stock merges with another company, you need to reflect this change of corporate structure in your investment records. To do this, Money provides a wizard that steps you through the process of recording the merger in your financial records. First, display the investment account register with the stock that has been involved in a merger. Then click the More Investing Tasks link, choose Record A Special Activity from the submenu, and then choose Record A Merger from the next submenu.
When you do this, Money starts the Record A Merger Wizard. To use it, simply
follow the on-screen instructions.

How do I record a liquidating dividend?
A liquidating dividend occurs when a corporation in which you own stock returns money to you, as a shareholder, that isn’t part of the corporation’s profits. These liquidating dividends occur infrequently, but you sometimes see them, as in the case when a company is essentially liquidating itself.
To record a liquidating dividend, simply record a return of capital transaction. The return of capital amount is equal to the amount of the liquidating dividend.
How do I handle a short sale?
Money includes an investment activity, or investment transaction type, for short sales.
You record a short sale transaction in the regular way—except you specify the activity as a short sale. Everything else works the same way as a regular sale.

Article Source: http://articlenexus.com

CPA Stephen L. Nelson is the author of do it yourself kits for Incorporating in Illinois, Illinois S corporation and Illinois limited liability company.

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