On Dec. 4, 20x1, Brown Co. acquired 6,000 shares of Venice, Inc. for $50,000. Brown incurred transaction costs of $2,500 in the acquisition. Brown acquired the shares principally for the purpose of selling them in the near term. On Dec. 31, 20x1, Venice's shares are qouted at $5 per share. Brown sold half of the investment on Jan 3, 20x2 at $7.50 per share. Brown incurred transaction cost of $1,500 on the sale. What amount of gain(loss) is recognized on Dec. 1, 20x1 and Jan 3, 20x2, respectively? a. (20,000); 6,000 b. (20,000); 13,500 c. (22,500);6,000 d. 22,500;13,500
On Dec. 4, 20x1, Brown Co. acquired 6,000 shares of Venice, Inc. for $50,000. Brown incurred transaction costs of $2,500 in the acquisition. Brown acquired the shares principally for the purpose of selling them in the near term. On Dec. 31, 20x1, Venice's shares are qouted at $5 per share. Brown sold half of the investment on Jan 3, 20x2 at $7.50 per share. Brown incurred transaction cost of $1,500 on the sale. What amount of gain(loss) is recognized on Dec. 1, 20x1 and Jan 3, 20x2, respectively? a. (20,000); 6,000 b. (20,000); 13,500 c. (22,500);6,000 d. 22,500;13,500
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter15: Contributed Capital
Section: Chapter Questions
Problem 1MC
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On Dec. 4, 20x1, Brown Co. acquired 6,000 shares of Venice, Inc. for $50,000. Brown incurred transaction costs of $2,500 in the acquisition. Brown acquired the shares principally for the purpose of selling them in the near term. On Dec. 31, 20x1, Venice's shares are qouted at $5 per share. Brown sold half of the investment on Jan 3, 20x2 at $7.50 per share. Brown incurred transaction cost of $1,500 on the sale. What amount of gain(loss) is recognized on Dec. 1, 20x1 and Jan 3, 20x2, respectively?
a. (20,000); 6,000 b. (20,000); 13,500 c. (22,500);6,000 d. 22,500;13,500
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