In 2016, Whiteside Catering purchased 60,000 shares of Roush Organic Foods' common stock for $945,000. On December 31, 2016, the fair value of the Roush shares was $900,000. On December 3, 2017, Whiteside sold all of their shares of Roush common stock for $17 per share less $42,000 in brokerage commissions. The realized gain on the sale of stock in 2017 that Whiteside should report is

Question

Elliot Mcdowell

Business

27 May, 19:39

In 2016, Whiteside Catering purchased 60,000 shares of Roush Organic Foods' common stock for $945,000. On December 31, 2016, the fair value of the Roush shares was $900,000. On December 3, 2017, Whiteside sold all of their shares of Roush common stock for $17 per share less $42,000 in brokerage commissions. The realized gain on the sale of stock in 2017 that Whiteside should report is

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Laura Whitney · Answer 1

The realized gain that Whiteside should report on sale of stock should be $33,000.

Explanation:

Whiteside bought the 60,000 shares from Roush organic foods at a price of $945,000 in 2016. On December 3, 2017 whiteside sold those 60,000 shares at $17 per share, with this they have also paid $42,000 in brokerage commissions. For taking out the gain we will subtract the purchase price of shares from selling price of share.

NOTE * (We will subtract the brokerage commission from the sales.)

Realized gain = (Sales - brokerage commission) - purchase price

NOTE * (SALES = $17 X 60,000 = $1020,000)

= ($1020,000 - $42,000) - $945,000

= $978,000 - $945,000

= $33,000