On January 1, 2010, Lightner bought 20, 000 shares (5% ownership)of Winter Corp.common stock for $360, 000.On May 3, 2010, Winter declared and distributed a 50% stock dividend.On September 1, 2010, Lightner sold 2, 000 shares of its investment in Winter stock for $21, 400.
Required:
Compute the amount of gain (loss)on the sale of this stock.

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Hobo jo Hobo tom · Accepted Answer

Final Answer :  20 , 000 + ( 0. 5 ′ 20 , 000 ) = 30 , 000  shares  $ 360 , 000 / 30 , 000 = $ 12  per share  $ 21 , 400 − ( $ 1 2 ′ 2 , 000 ) = $ 2 , 600  loss  \begin{array}{ll}20,000+(0.5 ^\prime20,000)  &  =30,000 	ext { shares } \\$ 360,000 / 30,000  &  =\$ 12 	ext { per share } \\$ 21,400-(\$ 12^\prime 2,000)  &  =\$ 2,600 	ext { loss }\end{array} 20 , 000 + ( 0. 5 ′ 20 , 000 ) $360 , 000/30 , 000 $21 , 400 − ( $1 2 ′ 2 , 000 ) ​ = 30 , 000  shares  = $12  per share  = $2 , 600  loss  ​

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