Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The balance sheet of the company ABC as at 1.12.2010 : begin{tabular}{|l|l|l|l|} hline multicolumn{2}{|c|}{ ASSETS } & EQUITY & LIABILITIES hline Long-term investments (500

image text in transcribed

The balance sheet of the company ABC as at 1.12.2010 : \begin{tabular}{|l|l|l|l|} \hline \multicolumn{2}{|c|}{ ASSETS } & EQUITY \& LIABILITIES \\ \hline Long-term investments (500 shares of X) & 10,000 & Shareholders' equity & 30,000 \\ \hline Short-term investments (300 shares of Y) & 9,000 & & \\ \hline cash & & & \\ \hline \multicolumn{1}{c|}{ Total assets } & 11,000 & & \\ \hline \end{tabular} Accounting policy: A. valuation of short-term investments: at the lower of the cost of purchase or the fair value at the balance sheet date; valuation of long-term investments: cost of purchase less impairment loss. B. Market or fair value for short and long term investment In December the company PURHCASED: - 400 shares of W for 90 per share, where 300 shares was treated as a long-term investment, and 100 share were bought for resale, - 200 shares of Z for 20 per share for business purposes. Stock broker's commission was 400; and in December the company SOLD: - 200 shares of Y for 32 per share, - 20 shares of W for 100 per share. Required: Calculate the value of shares at the end of the year (please don't record transactions) On 31.12.2010 the stock exchange prices were as follows: - Shares of X15 per share; - Shares of Y40 per share, - Shares of Z-20 per share, - Shares of W-90 per share

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

Auditing a business risk appraoch

Authors: larry e. rittenberg, bradley j. schwieger, karla m. johnston

6th Edition

9780324645095, 324645090, 978-0324375589

More Books

Students also viewed these Accounting questions

Question

7.1 Define selection and discuss its strategic importance.

Answered: 1 week ago