ACCT 401

Deirdre sold 128 shares of stock to her brother, James, for $3,584. Deirdre purchased the stock several years ago for $4,480. (Loss amounts should be indicated by a minus sign. Leave no answers blank. Enter zero if applicable.)

a. What gain or loss does Deirdre recognize on the sale?

b. What amount of gain or loss does James recognize if he sells the stock for $4,736?

c. What amount of gain or loss does James recognize if he sells the stock for $3,968?

d. What amount of gain or loss does James recognize if he sells the stock for $2,688?

In year 0, Longworth Partnership purchased a machine for $41,250 to use in its business. In year 3, Longworth sold the machine for $38,100. Between the date of the purchase and the date of the sale, Longworth depreciated the machine by $29,400. (Loss amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.)

a. What are the amount and character of the gain or loss Longworth will recognize on the sale?

b. What are the amount and character of the gain or loss Longworth will recognize on the sale if the sale proceeds are increased to $47,500?

c. What are the amount and character of the gain or loss Longworth will recognize on the sale if the sale proceeds are decreased to $9,300?