Question

An investor purchased 500 shares of common stock, $25 par, for $21,750. Subsequently, 100 shares were sold for $49.50 per share. What is the amount of gain or loss on the sale?
1) $12,750 gain
2) $600 gain
3) $600 loss
4) $9,250 loss

Answer 1

Answer:

correct option is 2) $600 gain

Explanation:

given data

common stock = 500 shares

par value = $25

sold = 100 share

per share = $49.50

solution

we get here first sale proceed of share that is

sale proceed of share = 100 share × $49.50 per share

sale proceed of share amount  = $4950

and cost of share will be

cost of share = 100 share × $43.50 per share

cost of share = $4350

so here we get gain on sale of share that is

gain = $4950 - $4350

gain on sale = $600

so correct option is 2) $600 gain