ILLUSTRATION 13. On 1st April, 2014, XY Ltd. has 15,000 equity shares of...
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ILLUSTRATION 13. On 1st April, 2014, XY Ltd. has 15,000 equity shares of ABC Ltd. at a book value of $15 per share (face value $10 per share). On 1st June, 2014, XY Ltd. acquired 5,000 equity shares of ABC Ltd. for $1,00,000 on cum right basis. ABC Ltd. announced a bonus and right issue. (1) Bonus was declared, at the rate of one equity share for every five shares held, on 1st July 2014. (2) Right shares are to be issued to the existing shareholders on 1st September 2014. The company will issue one right share for every 6 shares at 20% premium. No dividend was payable on these shares. (3) Dividend for the year ended 31-3-2014 was declared by ABC Ltd. @ 20%, which was received by XY Ltd. on 31stOctober, 2014. XY Ltd. (i) Took up half the right issue. (ii) Sold the remaining rights for $8 per share. (iii) Sold half of its share holding on 1st January, 2015 at $16.50 per share. Brokerage being 1%. You are required to prepare Investment Account of XY Ltd, for the year ended 31st March 2015 assuming the shares are being valued at average cost
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