During 2024, R2D2 Company purchased 10,000 shares of Goliath, Inc. for $30 per share and classified it as a trading security. During the year, R2D2 Company sold 2,500 shares of Goliath for $35 per share. At December 31, 2024, the market price of Goliath’s stock was $28 per share. What is the unrealized gain/(loss) that R2D2 will report in its income statement for the year ended December 31, 2024 for the investment in Goliath stock?
During 2024, R2D2 Company purchased 10,000 shares of Goliath, Inc. for $30 per share and classified it as a trading security. During the year, R2D2 Company sold 2,500 shares of Goliath for $35 per share. At December 31, 2024, the market price of Goliath’s stock was $28 per share. What is the unrealized gain/(loss) that R2D2 will report in its income statement for the year ended December 31, 2024 for the investment in Goliath stock?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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During 2024, R2D2 Company purchased 10,000 shares of Goliath, Inc. for $30 per share and classified it as a trading security. During the year, R2D2 Company sold 2,500 shares of Goliath for $35 per share. At December 31, 2024, the market price of Goliath’s stock was $28 per share. What is the unrealized gain/(loss) that R2D2 will report in its income statement for the year ended December 31, 2024 for the investment in Goliath stock?
Expert Solution
Step 1: Define unrealized loss
Unrealized profit and loss means The value of an investment that has not yet been sold or realized increases or decreases. If an investment's market value falls short of its original cost, the company experiences an unrealized loss.
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