Ptc Urgent Help Needed! Exam Tomorrow!

phunkyphantom22

Hi,

I'm hoping someone can help me out - I have just come across something in my revision which has confused me. I can't find anything in my notes or books and now I'm really worried about the exam tomorrow morning because I need to know how to work this out as it goes into another calculation.

I'm looking at disposals in the FA 85 share pool. I've got the 3 headers with no of shares, cost and indexed cost. I can put in the no of shares disposed and work out the cost no problem, but I cannot get my head around the indexed cost - I thought it was just disposal cost x index figure but none of my examples add up that way. Can someone help me urgently please?!

For example:

330 shares at cost of 395 and indexed cost of 491 were indexed to Apr 98 at 0.046, leaving me with 330 shares cost of 395 and indexed cost of 514.

200 shares were disposed with a cost of 239 - what is the indexed cost? The answer shows 312 but I've no idea how they got to that. Please help!!

AdamR

It is the indexed cost at disposal date (514) divided by the total number of shares held (330) and multiplied by the amount sold (200).

514/330*200=£311.515

This is also where the 239 cost comes from if you were unsure - 395/330*200=£239.393

Hope this helps and good luck for tomorrow.

phunkyphantom22

Legend! Thank you soooooo much!!!

Thanks and good luck if you're sitting any too

AdamR

Not a problem. Nah I'm all done now after taking PEV, DFS and PCR this week. Looking forward to a break from studying lol!