Question 7 Finance Corporation purchased R20 000 6% municipal stock at 95 on 1 November 1985. The broker's expenses amounted to R8,25. On 15 December the company purchased a further R8 000 of the same stock at 95 'ex-div'. The broker's expenses were R4,50. On 1 February 1986 the company sold R8 000 of the stock at 97. The broker's expenses were R2,73. Financial Accounting III / ICG / Page 47 On 1 May 1986 the company sold R8 000 of the stock at 96 'ex-div'. The broker's expenses were R3,40. In addition to the broker's expenses, brokerage of R10 per transaction is payable. Interest is paid quarterly on 31 March, 30 June, 30 September and 31 December Write up the investment account and close off at 31 May 1986, which is the end of the company's financial year. The balance of stock on hand is valued at the lower of averaged cost or market value. The market price at 31 May 1986 was 953. (20)