Question

On January 2, 2017, Theon purchased 10,000 shares of its own $5 par common stock in the market at $10 per share. Theon's January 2, 2017 journal entry for the acquisition of the shares is:

Answer 1

The net profit from each stock transaction can be calculated by subtracting the total amount spent on purchasing the shares from the total amount earned from selling the shares, after taking into account the stock company's transaction fees.

Step-by-step explanation:

The net profit from each stock transaction can be calculated by subtracting the total amount spent on purchasing the shares from the total amount earned from selling the shares.

For example, for the first transaction:

1. Shares purchased: 1000
2. Purchase price per share: $24.50
3. Total amount spent: 1000 * 24.50 = $24,500
4. Current price per share: $39.75
5. Total amount earned: 1000 * 39.75 = $39,750
6. Stock company's price per transaction: $9.99
7. Total transaction cost: 2 * 9.99 = $19.98
8. Net profit: 39,750 - 24,500 - 19.98 = $14,230.02

Similarly, the net profit for the second and third transactions can be calculated using the same formula.