Shares and securities

Quoted company Unquoted company

Proceeds x (find) Proceeds x (Given)

Cost x Cost x

Gain/loss x/(X) Gain/loss x/(X)

Avg. of quoted price = x

Ex.1

480+400 /2 = 440p / £4.4

For cost = matching rule

Ex2

Proceeds (16400/4000*400) 1640

Cost (1680)

Loss (40)

Proceeds (16400/4000*500) 2050

Cost (2000)

Gain 50

Proceeds (16400/4000*3100) 12710

Cost W1 (7922)

Gain 4788

Net gain 4798

W1 cost

Date no. of share Cost

95 2000 4000

2000 2500 7500

4500 11500

2019 (3100) (7922) 11500/4500*3100

c/f
Ex 3

Proceeds 6000

Cost W1 (2500)

Gain 3500

W1 cost

Date no. of shares cost

96 10000 15000

2002 10000 15000

10 BI 4000 0 (20000*1/5)

24000 30000

Disposal (2000) (2500) (30000/24000*2000)

c/f

Takeovers/Reorganisation
T/o

Mr.A Co Altd 10000 shares=cost=20000 aug2008

July 2019 Altd t/o by Bltd

Old shares (Altd) = against = new shares (Bltd)

Subsequently Dec 2020 = Mr.A sale Bltd shares= Preceeds xxx

Cost ???

Reorganization

Mr.A Co Altd 10000 shares = cost = 20000 Aug 2008

July 2019 Altd reorganized

Old shares (Altd) = against = new shares (A ltd)

Subsequently Dec 2020 = Mr.A sale new shares= Preceeds xxx

Cost ???

Questions
1. New share = cost = ….????
2. T/O or R/O date = gain/loss…???
New share = cost = ….????
Ex 6

Original 3000 shares = cost = 13250

No of share MV Cost

OS (3000*2) 6000 @2 12000 10600

PS (3000*1) 3000 @1 3000 2650

15000 13250

OS = 13250 * 12000/15000 = 10600

PS = 13250 * 3000/15000 = 2650

Ex 7

Original 20,000 shares = cost = 40,000

No of share MV Cost

OS (20000*3/4) 15000 @5 75000

PS (20000*1/4) 5000 @.9 4500

79500 40000

OS = 40000 * 75000/79500 =

PS = 40000 * 4500/79500 =

T/O or R/O date = gain/loss…???

Case 1 Shares = against = cash received

= normal computation = gain/loss = calculate

Case 2 shares = against = shares / Paper for paper transaction

No gain/loss calculation

New shares = cost calculation = so that we subsequently used the cost to calculate gain/loss on diposal.

Case 3 Shares = against = cash + shares

Deemed = part disposal

Ex.8

Original = 10000 shares = cost =20000

Shares (10000 *2) 20000 *1.25 = 25,000

Cash (10000 *0.5) 5,000

Nov 19 – 19/20

Proceeds/cash received 5000

Cost w1 3333

Gain 1,667

W1 cost

20000 * 5000/(5000+25000) = 3333

Total cost 20000

Deemed part (3333)

Shares = base cost 16,667