Mr Adil had the following transactions in GH Ltd. 01.10.99 Bought 10,000 shares (10% holding) for £15,000 11.09.03 Bought 2,000 shares for £5,000 01.02.04 Took up rights issue 1 for 2 at £2.75 per share 14.10.20 Sold 5,000 shares for £15,000 Required Compute the gain arising in October 2020.

Mr Adil had the following transactions in GH Ltd. 01.10.99 Bought 10,000 shares (10% holding) for £15,000 11.09.03 Bought 2,000 shares for £5,000 01.02.04 Took up rights issue 1 for 2 at £2.75 per share 14.10.20 Sold 5,000 shares for £15,000 Required Compute the gain arising in October 2020.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Mr Adil had the following transactions in GH Ltd.
01.10.99
Bought 10,000 shares (10% holding) for £15,000
11.09.03
Bought 2,000 shares for £5,000
01.02.04
Took up rights issue 1 for 2 at £2.75 per share
14.10.20
Sold 5,000 shares for £15,000
Required
Compute the gain arising in October 2020.

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