Investment with cum.div. quotation-executorship laws, Financial Accounting

Assignment Help:

Investment with cum.div. Quotation

Investment with cum.div. Quotation will be debited to the investment account at its full value. When the dividend is subsequently received it is apportioned:

  • Amount accrued to death being credited to capital column of the investment account
  • Amount accrued after death being credited to the income column.


The amount apportioned to capital should be transferred out of the Investment Account (thus maintaining the investment at its probate value) and credited to Estate Capital Account.

 

          Example              Date of death:                          30th June, 20X5

                                      Stock:                                       6% Treasury Stock

                                      Interest paid:                                      1st March

                                                                                     30th September

                                      Holding:                                   Shs 2m quoted at 94-96


 

Investment Account

 

                        Nominal     Income      Capital                           Nominal     Income      Capital

20X5                              Sh'000          Sh'000          Sh'000   20X5                              Sh'000          Sh'000           Sh'000

 

June         Estate                                                                         Sept         Estate

30            Capital                                                                        30            Cash

                Account                                                                                     Book

                (stock                                                                                         (interest

                  at                                                                                              pre-death)                                                          30

                death)                2,000                                    1,890

 

Sept                                                                                                            post-death                                   30

30            Estate

                Capital

                Account                                                              30

 


Related Discussions:- Investment with cum.div. quotation-executorship laws

Acquisition during the financial period-group accounts, Acquisition during ...

Acquisition during the financial period The holding company may acquire the subsidiary company partway through the financial period such that as at the balance sheet date, the

Vat, a recommendation regarding the current south African vat system

a recommendation regarding the current south African vat system

Concepts, what is the implication of applying accounting concepts wrongly

what is the implication of applying accounting concepts wrongly

Hat is the after-tax cash flow from the salvage value, 48 Morgado Inc. has ...

48 Morgado Inc. has provided the following data to be used in evaluating a proposed investment project: Initial investment $130,000 Annual cash receipts $78,000 Life of th

Holding company with a subsidiary and a sub-subsidiary, Holding company wit...

Holding company with a subsidiary and a sub-subsidiary Where the subsidiary company has another subsidiary company, then that subsidiary is referred to as a sub-subsidiary compan

Profit on initial investment, The common stock of the PP Corporation has be...

The common stock of the PP Corporation has been trading in a narrow price range for the past month, and you are convinced it is going to break far out that range in the next 3 mont

Heath foods''s bonds , Heath Foods's bonds have 6 years left over to maturi...

Heath Foods's bonds have 6 years left over to maturity. The bonds have a face value of $1,000 and a yield to maturity of 8%. They pay interest yearly and have a 10% coupon rate. Wh

Expense during 2013 on patent, In January, 2008, Sanford Corporation purcha...

In January, 2008, Sanford Corporation purchased a patent for a new product for $1,200,000. The patent was valid for fifteen years but it was estimated to have a useful life of ten

Proof of debts-bankruptcy and liquidation, PROOF OF DEBTS The following...

PROOF OF DEBTS The following rules apply as to the proving of debts: 1) A creditor has no right to vote or receive dividends until his debt is proved to the satisfaction of th

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd