How to find the correct answers to the incorrect ones Interpreting Footnotes on

Question

How to find the correct answers to the incorrect ones

Interpreting Footnotes on Security Investments SunTrust Banks, Inc. is a bank holding company based in Atlanta, Georgia. Founded in 1891 as the Commercial Travelers' Savings Bank, the organization underwrote The Coca-Cola Company's initial public offering in 1919, receiving Coca-Cola stock in lieu of underwriting fees. Over the ensuing 91 years, the SunTrust organization has maintained a close relationship with Coca-Cola. Robert Woodruff, Coca-Cola's president from 1923 to 1954, was the son of long-time SunTrust president, Ernest Woodruff. The original copy of the famous Coca-Cola formula is stored in a safe deposit box at one of SunTrust's Atlanta branches. The financial crisis of 2007-2009 put pressure on most large American financial institutions, including SunTrust. Although the company did not suffer the spectacular drops in asset values that made headlines at other banks, its exposure to property markets and securities connected to these markets caused the bank's regulatory capital to decline.

Explanation / Answer

1. Share of Cococola debit 110

To Underwriting Income Credit 110

2. Tax on capital gain

Fair Value - 23248256

Cost of shares - 110

Capital Gain - 2324716

Tax @35% - 813651 (2324716*35%)

Tax on capital gain Debit 813651

To Cash Credit 813651

3.

Average cost      2.28 (110/48.183) Sale Price 51 Number of Shares 4.61 Gain 224.34 (51-2.28)*4.605 Bank Debit 234.86 (51*4.605) To Capital Gain Credit 224.34 To Shares in cocacola 10.51 (4.605*2.28)

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.