Question

Bowie Glass purchased 17,000 shares of Lenz Framing common stock for $382,500 in 2016. When they created their December 31, 2016 balance sheet, the shares had a fair value of $373,150. On July 3, 2017, Bowie Glass sold all of the Lenz Framing stock for $27.25 per share less $15,000 in brokerage commission. In their 2017 financial statements, Bowie Glass should report

Answer 1

It should recognize a gain for 75,100 on his investment.

Step-by-step explanation:

27.25 x 1,700 = 463,250

commision (15,000)

net realizable value 448,250

book value (373,150)

gain on investment 75,100

Cash 448,250

Lenz Framing Investment 373,150

Gain on investment 75,100