Question 1.The following set of trading transactions has taken place # B/S symbo

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.

Explanation / Answer

ANSWER A :-

900

BALANCE INVENTORY

900-300=600

BALANCE STOCK (900*12.20)

10980

ANSWER B:-

AVERAGE COST METHOD :-

COST OF INVENTORY= 11778

UNREALIZED GAIN= 10980+1380-11778=582

FIFO METHOD:-

200*12.55

100*12.25

COST OF INVENTORY=11535

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

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

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