Page 288 - Corporate Finance PDF Final new link

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288 Corporate Finance BRILLIANT’S

Working Notes:
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1. Purchase of Stock (ex-interest) on 1.3.2016
Nominal value 24,000
Cost (` 24,000 × 0.90875) 21,810
Add: Brokerage 30
Total Cost 21,840

 6 5 
Accrued interest payable in addition for 5 months =  ` 24,000   = 600
 100 12 
2. Interest for 6 months ending on 31.3.2016

 6 6 
Interest will be received for 6 months on entire stock  ` 24,000   720
 100 12 
3. Sale of Stock (cum-interest) on 15.3.2016
Nominal Value 10,000
Sale proceeds (` 10,000 × 0.92625) 9,263

 6 2.5 
Less: Accrued interest including therein  ` 10,000   125
 100 12 
9,138
Less: Brokerage 13
Effective sale proceeds 9,125
Profit on Sale of ` 10,000 stock on 15.6.2016
Sale Proceeds 9,125
21,840
Less: Average cost: × ` 10,000 = 0.91 × ` 10,000 9,100
24,000
Profit on Sale 25

21,840
Closing value = × ` 14,000 = ` 12,740
24,000
4. Purchase of stock (ex-interest) on 1.8.2016
Nominal Value 6,000
Cost (` 6,000 × 0.91375) 5,482
Add: Brokerage 8
Total Cost 5,490

 6 4 
Accrued interest payable in addition for 4 months  ` 6,000   120
 100 12 