# Adm 4344 Term Test 3

Pages: 7 (1283 words) Published: February 26, 2013
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Term Test #3 (1 hour)

March 15, 2011
Prof. Kathryn Pedwell

Student Name:: _______________________________________________________________

Student I.D.: _________________________________________________________________

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

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!

Solution:

ACB:

# 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

PUC:

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 =...