Bob purchases 25,000 shares of common stock of Super Duper for $100,000. Exactly one year later...
Bob purchases 25,000 shares of common stock of Super Duper for $100,000. Exactly one year later when the stock is selling for $5 per share, Bob sells 5,000 shares for $25,000 and holds on to the remaining 20,000 shares. Which of the following statements is correct?
Group of answer choices
Bob has a realized capital gain of $4,000 and an unrealized capital gain of $1,000.
Bob has a realized capital gain of $5,000 and an unrealized capital gain of $20,000.
Bob has a $25,000 realized capital gain.
Bob has a $5,000 unrealized capital gain.
Homework Answers
Realized capital gain =Number of shares*(Share one year later
-Common Stock/Number of shares)
=5000*(5-100000/25000) =5000
Unrealized capital gain =Number of shares held on *(Share one year
later -Common Stock/Number of shares)
=20000*(5-100000/25000) =20000
Option b is correct option
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