During 2018 Sandhill Company purchased 9600 shares of Midi, Inc. for $26 per share. During the year Sandhill Company sold 2300 shares of Midi, Inc. for $31 per share. At December 31, 2018 the market price of Midi, Inc.’s stock was $24 per share. What is the total amount of gain/(loss) that Sandhill Company will report in its income statement for the year ended December 31, 2018 related to its investment in Midi, Inc. stock?
Solution:
Purchase of 9600 shares of midi @ $ 26 Per shares | ||
No. of shares = | 9,600 | |
Price | $ 26 | |
Purchase Cost | $ 2,49,600 | |
Sold 2300 Shares | -2300 | |
Balance Shares | 7,300 | |
Total Cost of Purchase Shares= | $ 2,49,600 | |
Less : Sales (2300 Shares * 31) | $ -71,300 | |
Book Value of the Balance shares | $ 1,78,300 | |
Market Value of the Shares (7300 Shares * $ 24) | $ 1,75,200 | |
Unrealized Loss = | $ 3,100 |
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