Asked by juan manuel iglesias on May 16, 2024
Verified
On January 1, 2010, Lightner bought 20, 000 shares (5% ownership)of Winter Corp.common stock for $360, 000.On May 3, 2010, Winter declared and distributed a 50% stock dividend.On September 1, 2010, Lightner sold 2, 000 shares of its investment in Winter stock for $21, 400.
Required:
Compute the amount of gain (loss)on the sale of this stock.
Stock Dividend
A distribution of additional shares of a company’s own stock to its shareholders instead of cash, usually based on a fixed ratio to the current holdings.
Gain (Loss)
The financial result that occurs when the selling price of an asset is higher (gain) or lower (loss) than its purchase price.
Compute
To calculate or process by means of a computer or mathematical operations.
- Recognize how to calculate gains or losses on the sale of marketable securities.
Verified Answer
Learning Objectives
- Recognize how to calculate gains or losses on the sale of marketable securities.
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