During 2015, Roberto sold 880 shares of Casual Investor Mutual fund for $8.70 pe

Question

During 2015, Roberto sold 880 shares of Casual Investor Mutual fund for $8.70 per share. The shares were purchased on the following dates: Date Shares Price May 31, 2011 420 $ 9.70 September 18, 2012 260 $ 8.00 October 21, 2012 470 $ 10.00 January 12, 2014 300 $ 7.50 Calculate the gain (loss) on the sale under the following assumptions: a. Basis is calculated using the first-in, first-out method. b. Basis is calculated using the average cost method (assume all shares are long-term). (Round "Average cost" to 3 decimal places. Round other intermediate computations and final answer to 2 decimal places.)

Explanation / Answer

Ans: First in first out method date Purchase sales Closing No. Price Value No. Price Value No. Price Value 31.05.2011 420 9.7 4074 420 9.7 4074 18.09.2012 260 8 2080 260 8 2080 21.10.2012 470 10 4700 470 10 4700 12.01.2014 300 7.5 2250 300 7.5 2250 2015 420 9.7 4074 260 8 2080 200 10 2000 270 10 2700 300 7.5 2250 Case 2 Average cost method date Purchase sales Closing No. Price Value No. Price Value No. Price Value 31.05.2011 420 9.7 4074 420 9.7 4074 18.09.2012 260 8 2080 260 8 2080 21.10.2012 470 10 4700 470 10 4700 12.01.2014 300 7.5 2250 300 7.5 2250 2015 880 8.8 7744 570 8.8 5016

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