Karen Smith bought Coca-Cola stock for $475 on March 31, 20X1. On November 15, 20X1, Karen received a non-taxable distribution of $155 on the 50 shares of stock she owned. She sold the stock for $300 on December 22, 20X1. What is her gain or loss on the sale

$20 loss

Explanation:

Karen Smith bought a coca-cola stock for $475 in March 31, 20X1

She received a non taxable distribution of $155 on November 15, 20X1

The first step is to calculate the adjusted basis

= $475-$155

= $320

Karen sold the stock for $300 on December 22, 20X1

Therefore, her gain or loss on the sale can be calculated as follows

= $300-$320

= $20 loss

Hence Karen has a loss of $20 on the sale

$250,000

Explanation:

Preparation of the statement of comprehensive income

TRAYER CORPORATION Statement of Comprehensive Income for the year ended 31 December 2017

Income from continuing operations $290,000

Discontinued operations:

Less Loss of operation of Discontinue Division, net of tax ($8,000)

($40,000 × 20% )

Gain on sales of Discontinued Division, net of tax $32,000

($40,000 - $8,000 )

Net income $314,000

($290,000+$8,000+$32,000)

Less Unrealized loss on available-for-sale securities, net of tax $64,000

[$80,000-($80,000 × 20%)]

Comprehensive income $250,000

($314,000-$64,000)

Therefore the comprehensive income will be $250,000