Lois purchased the following blocks of Westgate Stock: Date Shares Price June 12

Question

Lois purchased the following blocks of Westgate Stock: Date Shares Price June 12, 2012 1,140 $ 3.60 October 21, 2012 1,830 $ 3.80 December 18, 2014 1,500 $ 4.80 a. Lois sold 1,600 shares of the stock on November 20, 2015, for $4.60 per share for a total of $7,360. Using the first-in, first-out method, what is the gain or loss on the sale of the Westgate stock? b. Using the specific identification method, what is the gain or loss on the sale of the Westgate stock if 700 of the shares sold were identified as being from the October 21, 2012, purchase and the remaining 900 shares from the December 18, 2014 purchase?

Explanation / Answer

a:

Gain / Loss if FIFO method = $7360 - (1140 * 3.60) - (460 * 3.80) = Gain of $1508

b:

Gain / Loss if spcific identification method = $7360 - (700 * 3.80) - (900 * 4.80) = Gain of $380

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