Question

Question 1.The following set of trading transactions has taken place

# B/S symbol, Q, Price

1 B AAAA 300 $2.00

2 B BBBB 200 $12.55

3 B AAAA 300 $1.00

4 B BBBB 400 $12.25

5 B AAAA 300 $1.20

6 B BBBB 300 $12.00

7 S BBBB 300 $12.20

8 S AAAA 300 $2.10

9 B BBBB 300 $12.00
1. Assuming the stock value today is AAAA $ 2.30; BBBB $12.20. What are the quantities and current values of your positions?
2. Consider each of the following two accounting methods: A. Average Cost: When you sell, you record the cost of the sale at the average of all preceding purchases. B. FIFO: When you sell, you sell stocks in the same order it came in. What is the cost of your inventory (basis), the realized gain, and the unrealized gain (the difference between the current value of your positions and their costs) with each of those method

Question 2.There are 3 companies that need to be analyzed ANIP, ODP​, MDCO How much cash do they have on hand; will they need to raise cash in the next year and if so when and how much? just get the data and explain what you would look at if you were to invest in them.

Answer 1

ANSWER A :-

SERIAL NO.	PARTICULARS	QUANTITY	RATE	AMOUNT	BALANCE
1	PURCHASE AAAA	300	2	600	600
2	PURCHASE AAAA	300	1	300	900
3	PURCHASE AAAA	300	1.2	360	1260
4	SOLD AAAA	300	2.1
5	BALANCE INVENTORY 900-300=600	600	2.3	1380

SERIAL NO.	PARTICULARS	QTY.	RATE.	AMOUNT	BALANCE
1	PURCHASE BBBB	200	12.55	2510	2510
2	PURCHASE BBBB	400	12.25	4900	7410
3	PURCHASE BBBB	300	12.0	3600	11010
4	SOLD BBBB	300	12.2	3660
5	PURCHASE BBBB	300	12.00	3600
6	BALANCE STOCK (900*12.20) 10980

ANSWER B:-

AVERAGE COST METHOD :-

SERIAL NO.	PARTICULARS	QTY.	RATE.	AMOUNT	BALANCE
1	B AAAA	300	2	600	600
2	B BBBB	200	12.55	2510	3110
3	B AAAA	300	1	300	3410
4	B BBBB	400	12.25	4900	8310
5	B AAAA	300	1.2	360	8670
6	B BBBB	300	12	3600	12270
7	S BBBB	300	6.82	2046	10224
8	S AAAA	300	6.82	2046	8178
9	B BBBB	300	12	3600	11778

COST OF INVENTORY= 11778

UNREALIZED GAIN= 10980+1380-11778=582

FIFO METHOD:-

SERIAL NO.	PARTICULARS	QTY.	RATE	AMOUNT	BALANCE
1	B AAAA	300	2	600	600
2	B BBBB	200	12.55	2510	3110
3	B AAAA	300	1	300	3410
4	B BBBB	400	12.25	4900	8310
5	B AAAA	300	1.2	360	8670
6	B BBBB	300	12	3600	12270
7	S BBBB	300	200*12.55 100*12.25	3735	8535
8	S AAAA	300	2	600	7935
9	B BBBB	300	12	3600	11535

COST OF INVENTORY=11535

UNREALIZED GAIN=10980+1380=12360-11535=825