Adm 4344 Term Test 3

Topics: Taxation in the United States, Taxation, Tax Pages: 7 (1283 words) Published: February 26, 2013

Term Test #3 (1 hour)

ADM 4344A – Tax II

March 15, 2011
Prof. Kathryn Pedwell

Student Name:: _______________________________________________________________

Student I.D.: _________________________________________________________________

|Question #1 |/10 | |Question # 2 |/10 | |Question # 3 |/20 | |Total: | /40 /100 |

|Statement of Academic Integrity | |The School of Management does not condone academic fraud, an act by a student that may result in a false academic evaluation of that student or of | |another student. Without limiting the generality of this definition, academic fraud occurs when a student commits any of the following offences: | |plagiarism or cheating of any kind, use of books, notes, mathematical tables, dictionaries or other study aid unless an explicit written note to | |the contrary appears on the exam, to have in his/her possession cameras, radios (radios with head sets), tape recorders, pagers, cell phones, or | |any other communication device which has not been previously authorized in writing. | | | |Statement to be signed by the student: | |I have read the text on academic integrity and I pledge not to have committed or attempted to commit academic fraud in this examination. | | | |Signed:______________________________________ | | | |Note: an examination copy or booklet without that signed statement will not be graded and will receive a final exam grade of zero. |

Question #1: ACB and PUC (10 Marks)

When it was first established, Lichter Inc. issued 123000 shares at a price of $5.60 per share. Four years later, an additional 32,000 shares were issued for $8.62 per share. During the current year, a further 81,000 shares were issued to $10.15 per share.

One investor acquired 1,350 shares of the first group of shares issued, and an additional 4,230 shares from the most recent issue. Determine the adjusted cost base (ACB) per share, as well as the PUC of the investor’s shares.

Show all your calculations to obtain full marks!



# of sharescost/share Total ACB
First Purchase1,350 $ 5.60 $ 7,5601 Mark
Second Purchase4,230 $10.15 42,9351 Mark
Totals5,580 $50,495

Investor’s ACB: $50,495 ÷ 5,580 = $9.051 Mark


At the corporate level:

# of sharesPUC/share Total PUC
First sale123,000 $ 5.60$ 688,8001 Mark
Second Sale 32,000 $ 8.62 275,8401 Mark
Third Sales 81,000$10.15 822,1501 Mark
Total PUC236,000$1,786,790
1 Mark

PUC per share = $1,786,790 ÷ 236,000 =...
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