On 1.4.2007 Mr.Krishna Murty purchased 1,000 equity shares of Rs.100 each in TELCO Ltd@Rs.120each from a broker, who charged 2%brokerage.He incurred 50paise per Rs.100 as cost of shares transfer stamps. On 31.1.2008 Bonus was declared in the ratio of 1:2. Before and after the record date of bonus shares, the shares were quoted at Rs.175 per share and Rs.90 per share respectively. On 31.3.2008 Mr. Krishna Murty sold bonus shares to a broker, who charged 2% brokerage. Show the Investment Account in the books of Mr.Krishna Murty, who held the shares as Current assets and closing value of Investments shall be made at cost or Market value whichever is lower. Working notes should form as a part of your answer

On 1.4.2007 Mr.Krishna Murty purchased 1,000 equity shares of Rs.100 each in TELCO Ltd@Rs.120each from a broker, who charged 2%brokerage.He incurred 50paise per Rs.100 as cost of shares transfer stamps. On 31.1.2008 Bonus was declared in the ratio of 1:2. Before and after the record date of bonus shares, the shares were quoted at Rs.175 per share and Rs.90 per share respectively. On 31.3.2008 Mr. Krishna Murty sold bonus shares to a broker, who charged 2% brokerage. Show the Investment Account in the books of Mr.Krishna Murty, who held the shares as Current assets and closing value of Investments shall be made at cost or Market value whichever is lower. Working notes should form as a part of your answer

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter15: Contributed Capital

Section: Chapter Questions

Problem 1MC

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