Question

Meta Inc. pays $18,000 to buy stock in another company and an additional $350 in commissions. Three months later, Meta sells the stock for $19,000. At the time of sale, Meta will recognize______________.

a. $1,000 gain.
b. $650 loss.
c. $350 loss.
d. $650 gain

Answer 1

d. $650 gain

Step-by-step explanation:

Gain or loss is a function of the prices an item cost at the time of purchase and the amount realized on the sale of the item.

Gain/loss is the difference between the selling price and cost price. Where the cost is more, the company makes a loss, where it is not greater than or equal to, the company makes a gain.

total cost = $18,000 + $350

= $18,350

Gain/(loss) = $19,000 - $18,350

= $650