Question

During 15, Bob Richardson purchased 300 shares of common stock issued by Doctor's Medical Supply for $4200, including commission. Later in the same year, Bob sold the shares for $4900 after commission. Calculate the following. (Round all answers to two decimal places.)

a) Bob's profit: $700
b) Bob's commission: $700
c) Bob's loss: $700
d) Bob's earnings: $4900

Answer 1

Bob Richardson made a gross profit of $700 by selling the shares for more than he bought them. However, the exact commission and net profit cannot be determined without specific data about commission charges. The total earnings from the sale of the shares are $4900.

Step-by-step explanation:

The question involves basic arithmetic calculations related to stock transactions. According to the information provided, Bob Richardson purchased 300 shares of stock in Doctor's Medical Supply for $4200, which includes commission, and sold them later for $4900. This implies that the gross profit without considering any commissions is $4900 - $4200 = $700. However, the total profit will depend on the charges for buying and selling the stock, known as the commission.

Considering the examples provided as a reference, we will assume Bob paid a commission for each transaction. Since the total amount paid for the shares includes commission and no separate commission amount is provided, we cannot accurately determine the commission from the given data. Similarly, without knowing the commission, we cannot determine the exact net profit. Obviously, Bob has not incurred a loss as he sold the shares for more than he purchased them.

The total earnings refer to the total amount received from selling the shares, which, in this case, is $4900.