Question

Efrain owns 1,000 shares of RJ Inc. common stock which he purchased three years ago for $36,000. Efrain sells the 1,000 shares on October 15, 2018, for $10,000 On November 12, he purchases 400 shares of RJ Inc. preferred stock for $8,000. Efrain's recognized loss on the sale of the 1,000 shares will be A. $26,000. B. $10,400 O C. $15,600. O D. $0.

Answer 1

Answer:

option (A) $26,000

Explanation:

Data provided in the question:

Number of shares owned = 1,000

Cost of stocks 3 years ago = $36,000

Number of shares sold = 1,000

Selling value = $10,000

Now,

Loss on sale of 1000 Shares = Sale value - Purchase value

or

Loss on sale of 1000 Shares = $36,000 - $10,000

or

Loss on sale of 1000 Shares = $26,000

Hence,

answer is option (A) $26,000