During 2017, Crane Company purchased 79000 shares of Holmes Corporation common stock for $1250000 as an...
During 2017, Crane Company purchased 79000 shares of Holmes Corporation common stock for $1250000 as an equity investment. The fair value of these shares was $1191000 at December 31, 2017. Crane sold all of the Holmes stock for $17 per share on December 3, 2018, incurring $55000 in brokerage commissions. Crane Company should report a realized gain on the sale of stock in 2018 of
1.$97000.
2.$152000.
3.$93000.
4.$38000.
Homework Answers
The calculation of gain on sales of stock is shown below :
Selling price of stock (79,000 shares + $17 per share) $1,343,000
Less: Brokerage commission $55,000
Net sales price $1,288,000
Less: Cost of stock $1,250,000
Gain on sale of stock $38,000
Therefore, the correct answer is $38,000.
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During 2017, Crane Company purchased 79000 shares of Holmes
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Problem 17-5
Crane Company has the following securities in its investment
portfolio on December 31, 2017 (all securities were purchased in
2017): (1) 3,100 shares of Anderson Co. common stock which cost
$58,900, (2) 9,900 shares of Munter Ltd. common stock which cost
$564,300, and (3) 5,600 shares of King Company preferred stock
which cost $229,600. The Fair Value Adjustment account shows a
credit of $10,500 at the end of 2017.
In 2018, Crane completed the following securities
transactions.
1....
Crane Corporation has 70,000 shares of common stock outstanding.
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During 2017, Wildhorse Company purchased 89000 shares of Holmes
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fair value of these shares was $1281000 at December 31, 2017.
Wildhorse sold all of the Holmes stock for $17 per share on
December 3, 2018, incurring $65000 in brokerage commissions.
Wildhorse Company should report a realized gain on the sale of
stock in 2018 of
$98000.
$232000.
$163000.
$167000.
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stock outstanding. In addition, Crane had 455000 shares of
preferred stock which were convertible into 759000 shares of common
stock. During 2018, Crane paid $1250000 cash dividends on the
common stock and $796000 cash dividends on the preferred stock. Net
income for 2018 was $6800000 and the income tax rate was 40%. The
diluted earnings per share for 2018 is (rounded to the nearest
penny)
$2.55.
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Problem 17-5
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$58,900, (2) 9,900 shares of Munter Ltd. common stock which cost
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