Tricky question about guitar for fun

[Brucebubs]

Who's on first?

[EZYPIKINS]

I buy guitars to play. Not to sell. I have a friend who does this. He makes a couple bucks now and then. I don't see the point. It's not going to make you a significant amount of money/ Unless you deal in high end stuff. In which case, you probably don't need the money anyway.

[The Bard Rocks]

I calculated a profit of $100. You made $200 each time you sold it; that's $400. But you lost $300 when you bought it back. So a net profit of $100.


HOWEVER - - - since you said it is a trick question, no doubt someone will point out how and why I cam wrong.

[JayBee1404]

Let’s do the accountancy exercise..

Trading Account

Sales - 1,200 + 1,700 = 2,900
Purchases - 1,000 + 1,500 = 2,500

Sales 2,900 - Purchases 2,500 = Profit 400.

It matters not a fig that it was the same physical guitar, there are four transactions to take into account - the OP bought two guitars for a total cost of 2,500 and he sold two guitars for a total sales value of 2,900, thus making a profit of 400.

[madison]

The real question is what $1000 guitar could inspire such idiocy.

[MThomson]

Originally Posted by The Bard Rocks

I calculated a profit of $100. You made $200 each time you sold it; that's $400. But you lost $300 when you bought it back. So a net profit of $100.


HOWEVER - - - since you said it is a trick question, no doubt someone will point out how and why I cam wrong.

He lost no money when he bought it back, its the start of a new transaction. If you considered it as 2 Separate guitars bought and sold its obvious he made £400.

[hermithollow]

I come up with $200 to the good. Before the last sale you had $1500 in it. After the last sale you were ahead $200. It doesn't matter how many times you buy and sell it, it only matters what you have in it and what you get for it.

[JayBee1404]

Originally Posted by hermithollow

I come up with $200 to the good. Before the last sale you had $1500 in it. After the last sale you were ahead $200. It doesn't matter how many times you buy and sell it, it only matters what you have in it and what you get for it.

But you’re ignoring the 200 he made when he sold it the first time! 200 + 200 = 400.

[hermithollow]

Originally Posted by JayBee1404

But you’re ignoring the 200 he made when he sold it the first time! 200 + 200 = 400.

He lost that "profit" when he bought it back for $1500, at which point he was $300 in the hole. The question was - did he gain or lose money. From a business point of view the transactions might be considered separately, but from a "horse traders" perspective it is only the money you are ahead or behind that matters.

[JayBee1404]

Originally Posted by hermithollow

He lost that "profit" when he bought it back for $1500, at which point he was $300 in the hole.

When he bought it back for 1,500 he was in profit from the first sale by 200, so he had 1,500 - 200 = 1,300 of his ‘own money’ in that purchase. He then sold it for 1,700, giving him 400 profit.

As I said, you’re ignoring the 200 he made on his first sale. Check my post #19.

However you slice and dice it, over the whole of the four deals, he made 400. Trust me, I’m an accountant.

[hermithollow]

Originally Posted by JayBee1404

When he bought it back for 1,500 he was in profit from the first sale by 200, so he had 1,500 - 200 = 1,300 of his ‘own money’ in that purchase. He then sold it for 1,700, giving him 400 profit.

As I said, you’re ignoring the 200 he made on his first sale. Check my post #19.

However you slice and dice it, over the whole of the four deals, he made 400. Trust me, I’m an accountant.

Yes, you are right! I missed that.

[Silurian]

Originally Posted by JayBee1404

Trust me, I’m an accountant.

That's what mine said. He's now in the British Virgin Islands with all my money.

[PHJim]

-$1000+$1200-$1500+$1700=$400

Buying the guitar puts you $1000 in the red.
Selling it puts you $200 in the black.
Buying it back puts you $1300 in the red.
Selling it puts you $400 in the black.

I think that's right.

[Dru Edwards]

I hope all taxes from each sale were forwarded to the IRS . That's the only accounting that matters.

[MakingMusic]

These are two separate transactions. In the first transaction, the seller made $200. The second transaction netted the seller $200 as well. Too bad. I was expecting a trick math question.