Joy purchased 200 shares of HiLo Mutual Fund on July 15, 2014, for $10,500, and has been reinvesting dividends. On December 15, 2018, she sells 100 shares.AmountNo. of sharesPurchase July 15, 2014$10,500200Reinvested dividends, Oct 1, 201580010Reinvested dividends, Oct 1, 201697020Reinvested dividends, Oct 1, 2017 980 20$13,250250What is the basis for the shares sold assuming (1) FIFO and (2) average cost method?
What will be an ideal response?
Assuming FIFO, the basis in the shares is $5,250 [($10,500/200) × 100]. The average cost per share is $13,250 / 250 = $53 for a total $5,300.
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