Efrain owns 1,000 shares of RJ Inc. common stock which he purchased three years ago for $36,000. Efrain sells the 1,000 shares on October 15, 2018, for $10,000. On November 12, he purchases 400 shares of RJ Inc. preferred stock for $8,000. Efrain's recognized loss on the sale of the 1,000 shares will be

Question

Quizplus · Accepted Answer

Efrain's recognized loss is calculated as the difference between the sale price and the purchase price of the shares. He sold the shares for $10,000 and originally purchased them for $36,000, resulting in a loss of $26,000. The purchase of preferred stock does not affect the recognition of the loss on the common stock.

Efrain Owns 1,000 Shares of RJ Inc