In 2015, Daryl sold 425 shares of Basketball Heaven Mutual Fund for $18,000. He made the following purchases of Basketball Heaven stock: Assuming Daryl uses the single category average cost method, he will realize:

Question

In 2015, Daryl sold 425 shares of Basketball Heaven Mutual Fund for $18,000. He made the following purchases of Basketball Heaven stock:  Assuming Daryl uses the single category average cost method, he will realize:

Quizplus · Accepted Answer

Using the single category average cost method, we need to calculate an average cost per share. 
Total cost = $20,000 + $15,000 + $16,000 = $51,000 
Total shares = 120 + 200 + 150 = 470 
Average cost per share = $51,000 / 470 = $108.51

To calculate the long-term gain or loss, we need to subtract the cost of 425 shares from the sale price of $18,000. 
Sale price - cost = gain or loss 
$18,000 - (425 x $108.51) = $3,462.50 long-term loss

Therefore, the answer is D.

In 2015, Daryl Sold 425 Shares of Basketball Heaven Mutual