Homework Problem 8-1

# Homework Problem 8-1 - 572 Total Cost of 149 shares \$4,030...

This preview shows pages 1–3. Sign up to view the full content.

Solution to Problem 8-1 Facts : Ms. Wells makes the following purchases and sales of shares: Memo Inc Dates of Purchase Dates of Sale # and Cost Feb. 2006 60 @ \$24 Nov. 2007 90 @ \$28 Apr 2008 45 @ \$30 Oct. 2008 Sale (68) @ \$36 Sept. 2010 22 @ 26 Nov. 2010 Sale (53) @ 40 Demo Ltd. Dates of Purchase Dates of Sale # and Cost Apr. 2009 200 @ \$24 Dec. 2009 160 @ \$33 July 2010 Sale (260) @ 36 What are the tax implications?

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
Memo Inc. : February Purchase: 60 @ \$24 \$1,440 Nov. Purchase: 90 @ \$28 2,520 April Purchase: 45 @ \$30 1,350 Total Cost of 195 Shares \$5,310 Average Cost: \$5,310 ÷ 195 = \$27.23 68 Shares are sold on October 2008. The Tax Implications are: Proceeds of Sale: 68 shares @ \$36 \$2,448.00 ACB: 68 shares @ \$27.23 (1,851.64 ) Capital Gain \$ 596.36 Taxable Capital Gain \$ 298.18 Balance in the account of Memo Shares: (195 – 68) shares X \$27.23 avg. cost = 127 shares @ \$3,458 Opening Balance: \$3,458 Sept. 2010 Purchase: 22 @ \$26
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 572 Total Cost of 149 shares \$4,030 Average Cost: \$4,030 Ã· 149 = \$27.05 53 Shares are sold on Nov. 2010. The Tax Implications are: Proceeds of Sale: 53 shares @ \$40 \$2,120.00 ACB: 53 shares @ \$27.05 (1,433.65 ) Capital Gain \$ 686.35 Taxable Capital Gain \$ 343.18 Balance in the account of Memo Shares: (149 â€“ 53) shares X \$27.05 average cost = 96 shares @ \$2,597 Demo Shares : April 2009 Purchase: 200 @ \$ 24 \$ 4,800 December 2009 Purchase: 160 @ \$33 5,280 Total cost of 360 Shares \$10,080 Average Cost: \$10,080 Ã· 360 = \$28.00 260 Shares are sold in July 2010 and the Tax Implications are: Proceeds of Sale: 260 shares @ \$36 \$9,360 ACB: 260 shares @ \$28.00 (7,280 ) Capital Gain \$2,080 Taxable Capital Gain \$1,040 Balance in the account of Demo Shares: (360 â€“ 260) shares X \$28.00 average cost = 100 shares @ \$2,800...
View Full Document

{[ snackBarMessage ]}

### Page1 / 3

Homework Problem 8-1 - 572 Total Cost of 149 shares \$4,030...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online