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FINANCIAL ACCOUNTING
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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Mahan purchases 1,000 shares of Bluebird Corporation stock on October 3, 2022, for $280,000. On December 12, 2022, Mahan purchases an additional 750 shares of Bluebird stock for $196,000. According to market quotations, Bluebird stock is selling for $280 per share on 12/31/22. Mahan sells 500 shares of Bluebird stock on March 1, 2023, for $156,800. a. What is the adjusted basis of Mahan's Bluebird stock on December 31, 2022? Feedback Check My Work b. What is Mahan's recognized gain or loss from the sale of Bluebird stock on March 1, 2023, assuming the shares sold are from the shares purchased on December 12, 2022? In your computations, round the per share amount to the nearest whole dollar and use the rounded amount in subsequent computations. Mahan's recognized gain ✓is $ Feedback Check My Work Partially correct c. What is Mahan's recognized gain or loss from the sale of Bluebird stock on March 1, 2023, assuming Mahan cannot adequately identify the shares sold? Mahan has a recognized gain ✓of $
Transcribed Image Text:Mahan purchases 1,000 shares of Bluebird Corporation stock on October 3, 2022, for $280,000. On December 12, 2022, Mahan purchases an additional 750 shares of Bluebird stock for $196,000. According to market quotations, Bluebird stock is selling for $280 per share on 12/31/22. Mahan sells 500 shares of Bluebird stock on March 1, 2023, for $156,800. a. What is the adjusted basis of Mahan's Bluebird stock on December 31, 2022? Feedback Check My Work b. What is Mahan's recognized gain or loss from the sale of Bluebird stock on March 1, 2023, assuming the shares sold are from the shares purchased on December 12, 2022? In your computations, round the per share amount to the nearest whole dollar and use the rounded amount in subsequent computations. Mahan's recognized gain ✓is $ Feedback Check My Work Partially correct c. What is Mahan's recognized gain or loss from the sale of Bluebird stock on March 1, 2023, assuming Mahan cannot adequately identify the shares sold? Mahan has a recognized gain ✓of $
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