Mega Company receives net proceeds of $73,000 on the sale of stock investments that cost $79,000. This transaction will result in reporting in the income statement a
A) loss of $6,000 under "Other expenses and losses."
B) loss of $6,000 under "Operating expenses."
C) gain of $6,000 under "Other revenues and gains."
D) gain of $6,000 under "Operating revenues."

Question

Quizplus · Accepted Answer

Based on the information provided, Mega Company received net proceeds of $73,000 on the sale of stock investments that cost $79,000. This means that the company incurred a loss of $6,000 on this transaction. Since this loss is not part of the company's primary business operations, it would be reported as an "other expense and loss" in the income statement. Therefore, the correct answer is A) loss of $6,000 under "Other expenses and losses."

Mega Company Receives Net Proceeds of $73,000 on the Sale