Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

During the year ended 30 June 2021, Baber Ltd acquired shares in Dook Ltd. Baber Ltd has a general accounting policy to take any change

During the year ended 30 June 2021, Baber Ltd acquired shares in Dook Ltd. Baber Ltd has a general accounting policy to take any change in the fair value of its share investments through profit or loss. On 1 July 2020, Baber Ltd purchased 36 000 ordinary shares issued by Dook Ltd at the market price of $19 per share. Baber Ltd had a total of 50 000 000 ordinary shares outstanding. Baber Ltd purchased the shares of Dook Ltd with the intention to hold the shares for the purpose of receiving dividends in the long-term. Baber Ltd incurred stamp duty costs of $15 000 and paid in cash on the day of the share purchase. Also, on 31 July 2020, Baber Ltd's monthlty salary transactions included $17 000 paid to its employees who spent their time only on evaluating the purchase of shares in Dook Ltd. On 30 June 2021, Baber Ltds shares are trading at $100 per share and Dook Ltds shares are trading at $76 per share.

What was the value of Baber Ltds investment in the shares of Dook Ltd on 1 July 2020?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting Principles And Issues

Authors: Michael H. Granof, Philip W. Bell

4th Edition

013321852X, 978-0133218527

More Books

Students also viewed these Accounting questions

Question

How do certain genetic conditions affect motor control?

Answered: 1 week ago