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taskey · May 2010

K a quick question, looked at the answer and confoosed.

j bought 9,000 shares for £4,500 in may 96
sold 2,000 in august 05 (no price for sale)
bought 5,000 shares for £7,500 in may 08
sold 10,000 for £20,000 jan 10

compute his gain for the sale in 2010

So i set up the two colums for no of shares and cost, but am stumped as to find out the price of the share sold in aug 05. everything else i am fine with, but cannot see how the answer is £1,000 for the disposal

any help would be really helpful, is it just a simple sum or is there something i am missing?

thanks in advance

Tracy

SLM · May 2010

I find it odd that they have not given a sale value for the disposal, unless you are to presume they were sold for cost price? So the shares bought in May 96 cost 50p each. So therefore the ones sold would be sold for £1000.

Hope this helps

taskey · May 2010

that is what i thought, brill thanks

tracy

SLM · May 2010

Glad to help, at least I know something!!!

taskey · May 2010

this is madness, on the FIFO basis, how can you sell and match against something you have not acquired yet? or again am i missing something??

Tacy

SLM · May 2010

No I dont quite understand why either but I know if shares are bought in the next 30 days that is what a disposal is to be matched against. I think it has to do with the cost, as it uses the FIFO method it would mean the disposal cost is the most up to date cost???

taskey · May 2010

ok, that makes a bit of sense, will retry my question as it again has a random bizarre answer - although it is probably not random or bizarre it is me not understanding it lol

thanks again

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