Investment accounts in ipcc

Hi friends of IPCC,

Please refer to Illustration  1 of Investment accounts of ICAI Study Material for IPCC Accounting. The problem starts with " On 1.4.2010, Sundar had 25,000 Equity shares........".

My question is : On 15.11.10, there is an entry for profit of Rs. 50,000 on the debit side of the Investment Account in the Books of Sundar. How is this amount of Rs. 50,000 arrived at ?

 

Please if somebody can help.

 

Thanks and regards.

Replies (1)

25000 shares sold at rs 375000 less average cost 375000+80000+150000-10000-10000 /45000 multiplied by 25000=325000.therefore sale - avg cost =profit.375000-325000=50000

 

 

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