Question

Ashland Corporation sells 150 shares of common stock being held as an investment. The shares were acquired six months ago at a cost of $30 a share. Ashland sold the shares for $38 a share. The entry to record the sale is:___________

Answer 1

Dr Cash $5,700

Cr Gain on Sale of Stock Investments $1,200

Cr Stock Investments $4,500

Step-by-step explanation:

Based on the information given we were told that the Corporation sold 150 shares of common stock that was being held as an investment which means that in a situation where the shares were acquired at a cost of $30 a share in which the Corporation sold the shares for cost of $38 a share. The Journal entry to record the sale will be:

Dr Cash $5,700

(150 shares *$38)

Cr Gain on Sale of Stock Investments $1,200

($5,700-$4,500)

Cr Stock Investments $4,500

(150shares *$30)