On January 1, 2014, XYC purchased 100 shares (1 percent) of AB common shares at $120 per share. XYC uses the cost method to account for the AB shares. Subsequent to purchase, the following transactions and events happened: June 1, 2014, received a 20 percent stock dividend on the AB shares; March 31, 2015, XYC sold half of the AB shares at $108 per share. At the date of the sale, XYC should recognize a gain (loss) on the sale of the AB shares of:

Multiple Choice

1.$880 gain.

2. $600 loss.

3. $480 gain.

4. $220 gain.