Answered: 0,000 shares f

Business

Accounting

0,000 shares f

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

On July 1, 2020, ABC Corporation invested in the stocks of XYZ foreign corporation, by acquiring 10,000 shares at P12/share. On December 20,2020, XYZ declared a 20% stock dividend payable on January 15, 2021. On January 2, 2021, ABC Corporation sold 10,000 shares for P13/share.Compute the net capital gain to be included in regular income.

Definition Definition Increase in the value of a capital asset and the amount that is realized when the asset is sold off. A capital gain may be short-term or long-term depending on the tenure for which the asset is held.

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