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25 December, 15:16

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?

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  1. 25 December, 15:39
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    We are tasked to determine whether there is a gain or a loss. The solution is shown below:

    Cost basis: $21,750 / 500 shares = $43.5

    For 100 shares, we have:

    Cost basis for 100 shares = $43.5 * 100 = $4350

    Perform subtraction:

    Gain or Loss = Sales - Cost

    Gain or loss = ($49.50 * 100 shares) - $4350

    Gain or loss = $4950 - $4350

    Gain or loss = $ 600

    The answer is $600 (it is gain!).
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