Osborne BTX Workbook(FA2011) practice assesment 1 Task 2.6

gflynn31

Hi,

Can anyone solve the following -

10 April 2012 Purchase 5000 shares for £15000
12 January 2012 sell 1800 shares for £4000
1 Feb 2012 purchased 6800 shares for £21080
31 march 2012 sell 10000 shares for £40000

What is the gain/loss on the two disposals?

I calculate this to be 1400 loss on the jan disposal and 9320 gain on the march one however,
the answer in the book states that the loss is 1580 and the gain is 9500!!!!!

Probably something really obvious that I have overlooked, but I have pored over this for the last hour or so and cannot see how they get those figures.

Any help will be greatly appreciated, exam next Monday.

2 exams left after this one yippee!!!

Gary

Jo Clark

Hello Gary

You need to remember your matching rules.

So for the sale of shares in January, you match these to the purchase in February. Therefore:

6800 shares at a cost of 21080 means each share cost 3.10
You sold 1800 shares at a cost of 4000. 1800 at 3.10 = 5580
You sold for 4000 they were worth 5580 therefore a loss of 1580

For the disposal in March apply the relevant matching rules. I won't do this disposal unless you ask me to

Shout if you need any further help.


JC