Sports Spectacular purchased 1,000 shares of stock in The Athletic Warehouse for $30 per share.The investment is properly classified as a trading security.By the end of the year,the stock price has increased to $32 per share.How would the change in stock price affect Sports Spectacular's net income?

Question

Quizplus · Accepted Answer

The change in stock price from $30 per share to $32 per share represents a gain of $2 per share. Since Sports Spectacular purchased 1,000 shares, the gain would be $2,000 (1,000 shares x $2 per share). This gain would be included in the calculation of net income, increasing it by $2,000. Therefore, the correct answer is C, Increase net income by $2,000.

Sports Spectacular Purchased 1,000 Shares of Stock in the Athletic