John purchased 500 shares of TechCorp Inc. common stock for $12,500 on March 15, 2014. On July 1, 2016, John received 50 new shares in a nontaxable stock dividend. As of July 1, the stock was trading at $30 per share. John sells the 50 new shares on August 15, 2016, for $1,600. Due to the stock sale, John will recognize a: A. $100 STCL B. $100 LTCG C. $1,600 STCG D. $1,600 LTCG
John purchased 500 shares of TechCorp Inc. common stock for $12,500 on March 15, 2014. On July 1, 2016, John received 50 new shares in a nontaxable stock dividend. As of July 1, the stock was trading at $30 per share. John sells the 50 new shares on August 15, 2016, for $1,600. Due to the stock sale, John will recognize a: A. $100 STCL B. $100 LTCG C. $1,600 STCG D. $1,600 LTCG
Chapter11: Property Dispositions
Section: Chapter Questions
Problem 76IIP
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I need assistance with this general accounting question using appropriate principles.
Transcribed Image Text:John purchased 500 shares of TechCorp Inc. common stock for
$12,500 on March 15, 2014. On July 1, 2016, John received 50 new
shares in a nontaxable stock dividend. As of July 1, the stock was
trading at $30 per share. John sells the 50 new shares on August 15,
2016, for $1,600. Due to the stock sale, John will recognize a:
A. $100 STCL
B. $100 LTCG
C. $1,600 STCG
D. $1,600 LTCG
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