An investor purchased 500 shares of common stock, $25 par, for $21,750. Subsequently, 100 shares were sold for $40.50 per share. What is the amount of gain or loss on the sale?

Question

Quizplus · Accepted Answer

The total cost of the 500 shares of common stock was $21,750. This means the cost per share was $43.50 ($21,750 / 500). When 100 shares were sold for $40.50 per share, the total proceeds were $4,050. The cost of the 100 shares was $4,350 (100 shares x $43.50), which means there was a loss of $300 ($4,050 - $4,350). Therefore, the answer is C, $300 loss.

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