On January 5, 2019, Prince Company acquired in cash 3,000 shares of ABC Inc., to keep...

On January 5, 2019, Prince Company acquired in cash 3,000 shares of ABC Inc., to keep as short-term marketable securities, at a price of $8.7 per share. To acquire these shares, Prince Company paid additional $900 for commission fees. On April 9, 2019, Prince Company sold 2,000 of these shares for $9.2 per share. Prince Company also paid $250 commission fees for this sale. The sale of marketable securities will result in

a.Gain on sale of investment for $650

b.Gain on sale of investment for $400

c.Loss on sale of investment for $150

d.Gain on sale of investment for $150

.At the end of the first year of operations, the total cost of the marketable securities that ABC Company holds is $146,000. During the second year, half of these securities are sold for $86,500 cash. Which of the following is true regarding the sale of the marketable securities in the second year?

a.The unrealized holding gain on investment is $13,500.

b.The loss on sale of investment is $13,500

c.The gain on sale of investment is $86,500

d.The gain on sale of investment is $13,500

Expert Solution

ekkarill92 answered 1 year ago

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