On September 18, 2019, Rose Company purchased 6,000 shares (9%) of Wozniak, Inc. stock for $28 per share. The market value per share of Wozniak's stock at December 31, 2019 was $24. On May 12, 2020, Rose Company sold 2,400 shares of its Wozniak stock for $19 per share. The market value of Wozniak's stock at December 31, 2020 was $33 per share. On April 17, 2021, Rose Company received a dividend of $4 per share on the Wozniak stock. Rose Company sold 2,700 shares of its Wozniak stock on July 19, 2021 for $27 per share. At December 31, 2021, the market value of the Wozniak stock was $22 per share.

Calculate the amount of the unrealized loss reported on Rose Company's 2021 income statement. If an unrealized loss would not be recorded in 2021 on this investment, enter a 0 as your answer.

Question

contestada

Respuesta :

andromache andromache · Answer 1 · 2019-11-12T12:45:51+01:00

Answer:

$9,900

Explanation:

For computing the amount of the unrealized loss, first we have to find out the shareholding and unrealized loss per share which is shown below:

Shareholding = Purchase value of shares - (Sale value of shares + sale value of shares)

= 6,000 shares - (2,400 shares + 2,700 shares)

= 6,000 shares - 5,100 shares

= 900 shares

And, the unrealized loss per share = $33 - $22 = $11

Now the unrealized loss would be

= 900 shares × $11

= $9,900