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During 2020, Carla Vista Company purchased 87000 shares of Kingbird Corporation common stock for $1330000 as an equity investment. The fair value of these shares was $1263000 at December 31, 2020. Carla Vista sold all of the Kingbird stock for $17 per share on December 3, 2021, incurring $63000 in brokerage commissions. Carla Vista Company should report a realized gain on the sale of stock in 2021 of

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abiolataiwo2015

Answer:

$86,000

Explanation:

Calculation to determine what Carla Vista Company should report a realized gain on the sale of stock in 2021

2021 Realized gain on the sale of stock=87000 shares x $17 per share = $1,479,000

2021 Realized gain on the sale of stock=$1,479,000-$63,000=$1,416,000

2021 Realized gain on the sale of stock=$1,416,000-$1,330,000

2021 Realized gain on the sale of stock=$86,000

Therefore Carla Vista Company should report a realized gain on the sale of stock in 2021 of $86,000

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