On October 1 of Last Year, Canadian Trader Corp

question 18

Multiple Choice

On October 1 of last year, Canadian Trader Corp.(CTC) purchased 1,000 shares of the Regal Bank for $50,000 as a trading investment.At year end, December 31, the fair value of these shares was $52,000.On February 1 of this year, CTC sold all these shares for $51,000.The realized gain (loss) that CTC will report this year is

• A)a gain of $1,000.
• B)a gain of $2,000.
• C)a loss of $2,000.
• D)a loss of $1,000.

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Definitions:

Cash Dividends

Distributions from a corporation to its owners, typically in the form of profit payouts.

Brokerage Fees

Charges levied by a broker for facilitating transactions between two parties, such as buying or selling stocks.

Available-For-Sale Security

A financial investment not classified as held-for-trading or held-to-maturity, which can be sold in the short term for cash.

Fair Value

An estimate of a security's worth on an open market, based on what a knowledgeable, willing, and unpressured buyer would likely pay to a knowledgeable, willing, and unpressured seller.