Kevin purchases 1,000 shares of Bluebird Corporation stock on October 3, 2018, for $300,000. On December...

Kevin purchases 1,000 shares of Bluebird Corporation stock on October 3, 2018, for $300,000. On December 12, 2018, Kevin purchases an additional 750 shares of Bluebird stock for $210,000. According to market quotations, Bluebird stock is selling for $285 per share on 12/31/18. Kevin sells 500 shares of Bluebird stock on March 1, 2019, for $162,500.

a. The adjusted basis of Kevin's Bluebird stock on December 31, 2018, is $_________

b. What is Kevin's recognized gain or loss from the sale of Bluebird stock on March 1, 2019, assuming the shares sold are from the shares purchased on December 12, 2018?

Kevin's recognized (gain or loss) is $___________

c. What is Kevin's recognized gain or loss from the sale of Bluebird stock on March 1, 2019, assuming Kevin cannot adequately identify the shares sold?

Kevin has a recognized (gain or loss) of $__________

Solutions

Expert Solution

Date	Goods of Purchase	Cost of Goods	Inventory	Balance Amount
October 3 1,000 shares	1000 @ $300		1000 @ $300	$300,000
December 12	750 @ $280		1000 @ $300 750 @ $280	(300000+210000) =$510,000
March 1		500 @ $325		(510,000-162,500) =$347,500

a. The adjusted basis of Kevin's Bluebird stock on December 31, 2018, is $510,000_________

b. What is Kevin's recognized gain or loss from the sale of Bluebird stock on March 1, 2019, assuming the shares sold are from the shares purchased on December 12, 2018?

Kevin's recognized (gain or loss) is $_(162500-140000) =Gain $22,500__________

purchased on December 12, 2018 ($280 x 500=140000)

c. What is Kevin's recognized gain or loss from the sale of Bluebird stock on March 1, 2019, assuming Kevin cannot adequately identify the shares sold?

Kevin has a recognized (gain or loss) of $_(510,000-162,500) =$347,500_________

ekkarill92 answered 1 year ago

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