Broward Corp. owns 1,500 shares of Silver Fox Corporation common stock. Broward Corp. purchased the 1,500 shares on April 17,2009, for $20,000. On December 8, 2014, Broward sells 750 shares for $5,000. On January 2, 2015, Broward Corp. buys 250 shares of Silver Fox Corporation common stock for $1,750 and 50 shares of Silver Fox Corporation preferred stock for $1,000. The preferred stock is nonvoting, nonconvertible.

What is Broward's realized and recognized loss on the December 8 sale of stock?

Question

Demarcus Avery

Business

25 July, 13:34

Broward Corp. owns 1,500 shares of Silver Fox Corporation common stock. Broward Corp. purchased the 1,500 shares on April 17,2009, for $20,000. On December 8, 2014, Broward sells 750 shares for $5,000. On January 2, 2015, Broward Corp. buys 250 shares of Silver Fox Corporation common stock for $1,750 and 50 shares of Silver Fox Corporation preferred stock for $1,000. The preferred stock is nonvoting, nonconvertible.

What is Broward's realized and recognized loss on the December 8 sale of stock?

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Answers (1)

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Everett Pace · Answer 1

Disallowed loss = 1428.57

Explanation:

given data

Units total cost

17 Apr, 09 1500 20000

8 Dec, 14 - 750 - 5000

2 Jan, 15 250 1750

2 Jan, 15 50 1000

solution

we get here Broward realized and recognized loss that is

The loss or gain on sale (5000 - 20000 : 2) - 5000

Allowed loss (750 : 1050) * 5000 3571.43

Disallowed loss 1428.57