At the end of its first year, the trading securities portfolio consisted of the following common stocks. In the following year, the Benes common stock is sold for cash proceeds of $57,000. The gain or loss to be recognized on the sale is a

Question

At the end of its first year, the trading securities portfolio consisted of the following common stocks.  In the following year, the Benes common stock is sold for cash proceeds of $57,000. The gain or loss to be recognized on the sale is a

Quizplus · Accepted Answer

The cost of the Benes common stock was $60,000 ($50,000 purchase price + $10,000 brokerage fees). Since it was sold for $57,000, there is a loss of $3,000 ($60,000 - $57,000). Therefore, the answer is B) loss of $3,000.

At the End of Its First Year, the Trading Securities