Willow Corporation purchased 2,000 shares of Apex common stock at $70 per share
ID: 2446997 • Letter: W
Question
Willow Corporation purchased 2,000 shares of Apex common stock at $70 per share plus $4,000 brokerage fees as a short-term investment. The shares were subsequently sold at $80 per share less $4,800 brokerage fees. The cost of the securities purchased and gain or loss on the sale were:
Cost
Gain or Loss
$140,000
$11,200 gain
Cost
Gain or Loss
$144,000
$11,200 loss
Cost
Gain or Loss
$144,000
$11,200 gain
Cost
Gain or Loss
$140,000
$20,000 gain
Cost
Gain or Loss
$140,000
$11,200 gain
Cost
Gain or Loss
$144,000
$11,200 loss
Cost
Gain or Loss
$144,000
$11,200 gain
Cost
Gain or Loss
$140,000
$20,000 gain
Explanation / Answer
Cost of Purchased Cost 2000*70 140000 Brokerage 4000 Cost 144000 Sales 2000*80 160000 Less: Brokerage -4800 Net 155200 Gain 155200-144000 11200 The correct answer is C. Cost $ 144000, Gain $ 11200
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