Mitch Owns 1,000 Shares of Oriole Corporation Common Stock (Adjusted

question 12

Essay

Mitch owns 1,000 shares of Oriole Corporation common stock (adjusted basis of $15,000). On April 27, 2016, he sells 400 shares for $5,200, while on May 5, 2016, he purchases 200 shares for $3,600.
a.​What is Mitch's recognized gain or loss resulting from these transactions?
a. and
b.​What is Mitch's basis for the stock acquired on May 5, 2016?
b. if he had sold the 400 shares on December 27, 2016, and purchased the 200 shares on January 5, 2017?
c.​Could Mitch have obtained different tax consequences in

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Definitions:

FIFO

An inventory valuation method where goods first purchased or produced are the first to be sold, standing for First-In, First-Out.

Perpetual Inventory System

A perpetual inventory system is a method of accounting for inventory that records sales and purchases of goods in real-time through an inventory management system, offering accurate and up-to-date stock levels.

Ending Inventory

The value of goods available for sale at the end of an accounting period, calculated as the beginning inventory plus purchases minus cost of goods sold.

LIFO

"Last In, First Out," an inventory valuation method where goods purchased last are the first to be used or sold.