Question

This is an entry from SUA 9th edition

Sold 150 shares of Green Corporation common stock for $26 per share. The shares were originally purchased on July 11, 2016, for $22 per share plus a commission of $85. Central Brokerage retained a commission of $75 on the sale and forwarded check no. 4289 for the net sale proceeds to Waren.

*Calculate and record the gain or loss on the sale of the marketable securities.

*Be sure to consider the effects of both the purchase and sale commission expenses.

Answer 1

Solution:

Particulars	Debit	Credit
Investment in marketable securities - Sohn Corporation	$ 3,385
Cash		$ 3,385
Cash	$ 3,825
Realized gain on sale of marketable securities		$ 440
Investment in marketable securities - Sohn Corporation		$ 3,385

　

Explanation:

Shares purchased	150
Purchase price per share	$ 22.00
Total cost excluding commission	$ 3,300
Plus: Commission	$ 85
Total cost inclusive of commission	$ 3,385
Shares sold	150
x Selling price per share	$ 26.00
Total proceeds excluding commission	$ 3,900
Minus: Commission	$ 75
Total proceeds inclusive of commission	$ 3,825
Gain on sale of the marketable securities	$ 440