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An analysis of Kenny Corporation's Investment in Marketable Securities account during 2018 disclosed the following:
Kenny's 2018 income statement included a $90,000 loss on sale of marketable securities and $65,000 dividend income from marketable securities.All payments and proceeds relating to marketable securities transactions were in cash.
-The cash proceeds received by Kenny Corporation in 2018 for the sale of marketable securities was:
A)$230,000.
B)$280,000.
C)$195,000.
D)$180,000.

Question

[The following information applies to the questions displayed below.]
An analysis of Kenny Corporation's Investment in Marketable Securities account during 2018 disclosed the following:
  Kenny's 2018 income statement included a $90,000 loss on sale of marketable securities and $65,000 dividend income from marketable securities.All payments and proceeds relating to marketable securities transactions were in cash.
-The cash proceeds received by Kenny Corporation in 2018 for the sale of marketable securities was:
A)$230,000. 
B)$280,000. 
C)$195,000. 
D)$180,000.

Quizplus · Accepted Answer

To calculate the cash proceeds received for the sale of marketable securities, we need to subtract the loss on sale from the total proceeds. The loss on sale was $90,000, so the total proceeds were $280,000 ($90,000 loss + $190,000 cost basis + $80,000 unrealized gain). Therefore, the cash proceeds received for the sale of marketable securities was $180,000 ($280,000 total proceeds - $90,000 loss).

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