Question

On november 12, 2022, sean connery sells 100 shares of loser inc. for $150 per share. he had purchased these shares several years ago at $250 per november 18, 2022, he acquires 80 shares of loser inc. for $100 per december 22, 2022, he acquires 50 shares of loser inc. at $80 per is the adjusted cost base of the 130 shares that he holds after the december 22, 2022 purchase?

a. $12,000.
b. $29,000.
c. $22,000.
d. $14,000.

Answer 1

The adjusted cost base (ACB) for the 130 shares of Loser Inc. that Sean Connery holds after the December 22, 2022 purchase is $12,000, which is option A.

Step-by-step explanation:

The question pertains to calculating the adjusted cost base (ACB) for shares that Sean Connery purchased and subsequently added to at different prices. To find the ACB of the 130 shares of Loser Inc. that he holds after the December 22, 2022 purchase, we perform the following calculations:

• 80 shares acquired on November 18, 2022, at $100/share result in an investment of 80 shares × $100/share = $8,000.
• 50 shares acquired on December 22, 2022, at $80/share result in an investment of 50 shares × $80/share = $4,000.

Add these two amounts to get the total cost of the 130 shares:

$8,000 (from November 18) + $4,000 (from December 22) = $12,000.

Therefore, the adjusted cost base for the 130 shares of Loser Inc. that Sean Connery holds is $12,000, which corresponds to option A.