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

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Investment with ex. div. quotation

Investment with ex. div. quotation will be debited to the investment account at its ex. div. value. The full impending dividend will also be debited to the Investment Account. When the dividend is subsequently received it is apportioned in the same way as a) above.  A journal transfer is then made from the Capital column of the Investment Account to the debit of the Estates Capital Account in order to restore the book value of the investment to its probate (quarter—up) value.

 

Exanple                         Date of Death:              30th June, 20X5

 

                                          Stock:                        3% Kenya Stock

                                       Interest paid:                 31st January

                                                                           31st July

                                       Holding:                       Shs 6m quoted at 86—88 ex.div.

 

                                                             Investment Account

                        Nominal     Income      Capital                           Nominal     Income      Capital

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

 

June      Estate                                                      July       Estate

30         Capital                                                     31         Cash

            Account                                                              Book

            (stock                                                                  (interest

              at                                                                      pre-

            death)          6,000                          5,190               death                                                75

                                                                                       post-death                        15

 

            (interest                                                   July       Estate Capital

             due)                                                 90   31         Account

                                                                                                                                               15

 


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