An investor purchased 500 shares of common stock, $25 par, for $19,250. Subsequently, 100 shares were sold for $35 per share. What is the amount of gain or loss on the sale?

Question

Quizplus · Accepted Answer

The total cost of 500 shares is $19,250. This means the cost per share is $38.50 ($19,250 / 500).

When 100 shares are sold for $35 per share, the total sale price is $3,500 ($35 x 100).

The cost of the 100 shares sold is $3,850 ($38.50 x 100).

Therefore, the loss on the sale is $350 ($3,500 - $3,850).

An Investor Purchased 500 Shares of Common Stock, $25 Par