On February 24,Bramlett Company purchased 4,000 shares of Delaney Corp.'s newly issued 6 percent cumulative $75 par preferred stock for $304,000.Each share carried one detachable stock warrant entitling the holder to acquire at $10 one share of Delaney no-par common stock.On February 25,the market price of the preferred stock was $72 per share,and the market price of the stock warrants was $8 per warrant.On December 29,Bramlett sold all the stock warrants for $41,000.The gain on the sale of the stock warrants was

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- Bramlett Company purchased 4,000 shares of Delaney Corp.'s preferred stock for $304,000.
- Each share carried one detachable warrant entitling the holder to acquire one share of Delaney's common stock at $10.
- Therefore, Bramlett received 4,000 warrants with their purchase of the preferred stock.
- The market price of the preferred stock was $72 per share on February 25, so the 4,000 shares Bramlett purchased had a total market value of $288,000.
- However, the warrants had a market value of $8 each, so the 4,000 warrants Bramlett received had a total market value of $32,000.
- The total market value of the preferred stock and warrants on February 25 was $320,000 ($288,000 + $32,000).
- Bramlett sold all 4,000 warrants on December 29 for $41,000, which is $9,000 higher than their original market value of $32,000 on February 25.
- Therefore, Bramlett realized a $9,000 gain on the sale of the warrants.

On February 24,Bramlett Company Purchased 4,000 Shares of Delaney Corp