Question

ramesh purchased 100 shares@ rs. 120 per share and paid a brokerage of 0.5%. find out total amount spent by him. give journal entries for this investment.

Answer 1

total purchase of shares is 6.

five persant of 120 =6 so answer is 120+6=126

Answer 2

The answer to the following question is below.

Explanation:

Given:

Purchase Price = rs.120 per share

Brokerage = 0.5%

Number of Share = 100

Calculation:

Total Amount paid = (Purchase price x Number of share) + Brokerage paid

Total Amount paid = (120 x 100) + (120 x 100)0.5%

                               = 12,000 + 60

                               = 12,060

                            Journal Entry

                       In the Books of ( --- Limited)

Date     Account Title and Explanation      Debit       Credit  

           Treasury Stock          a/c Dr             12,000

           Brokerage paid        a/c Dr                     60

           To Bank                     a/c                                   12,060

      (Being share purchased and paid 0.5% brokerage)

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