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During 2017, Grambling Company purchased 10,000 shares of Southern Corp. common stock for $215,000 as a passive interest investment. The fair value of these shares was $289,000 at December 31, 2017. During 2018, Grambling sold all of the Southern stock for $226,000. Grambling Company should report a realized gain on the sale of stock in 2018 of:______.A. $25,000.
B. $26,000.
C. $11,000.
D. $37,000.

Respuesta :

abiolataiwo2015

Answer:

C. $11,000

Explanation:

Calculation to determine what Grambling Company should report as a realized gain on the sale of stock in 2018

Using this formula

2018 Realized gain on the sale of stock =Selling price-Cost of securities

Let plug in the formula

2018 Realized gain on the sale of stock=

$226,000 -$215,000

2018 Realized gain on the sale of stock=$11,000

Therefore Grambling Company should report a realized gain on the sale of stock in 2018 of $11,000

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