shares disposal proceeds

valentino46

hi,

im having a blank when calculating the cost of shares when sold. the company has previously bought 300 shares at £3 and then 12000 at £3.50 followed up with bonus shares basis 1/5, after balncing we then sell 5000 but i dont know what cost at which they are sold.

hope someone can help im missing the link.

thanks

rob

*Jo

Morning,

You have to apply indexation before you can find out the cost when sold. There should be indexation amounts given to you in your text book/exam paper. What are you working from? I have the kaplan workbook. the bonus shares have no cost and are just matched with the orignals but there will be two lots of indexation to work out too.

Lyn32

valentino46 wrote: »

hi,

im having a blank when calculating the cost of shares when sold. the company has previously bought 300 shares at £3 and then 12000 at £3.50 followed up with bonus shares basis 1/5, after balncing we then sell 5000 but i dont know what cost at which they are sold.

hope someone can help im missing the link.

thanks

rob

Hi Rob

I just calculated according to your info! But not so 100% sure but hoping will give you an idea and also it depends on the date of purchased when you lay out your calculation.
Purchased 300 £900 (300x3)
Bonus(1 for5) 60(300/5)
Total 360 £900
Purchased 12,000 £42,000 (12,000x3.5)
Total 12,360 42,900
Disposal (5000) (17,354) (42,900/12,360 x5000)
total 7360 25546

valentino46

hi lyn,

im working from the osborne books, i am actually given the answers for the task although have attempted it myself but cannot work out the bonus share cost (if there is one) the info is as follows:

1/92 bought 3000 @ 3
1/95 bought 12000 @ 3.50
1/99 received bonus shares 1/5
1/2000 sold 5000 shares

i have calculated as follows so far:

1/92 3000 shares = 9000
indexed at 0.07 = 693

1/95 12000 shares = 42000

balanced the categories giving:

number = 15000
cost = 51000
indexed cost = 51693

1/99 bonus shares 3000 on the basis of 1/5

then i get slightly lost as when to index etc


thanks for your help on this

rob

Lyn32

I am using Kaplan book, as far as I am aware bonus don't have a cost unless given .