Business 302 report | Business & Finance homework help
The gain recognized on the sale of the stock by ZonTech was calculated as follows:
Sales Price – Cost Basis = Gain Recognized
$6,000,000 (sales price) – $4,000,000 (cost basis) = $2,000,000 (gain recognized).
This transaction created a cash inflow of $6 million for ZonTech. The total amount received from the sale of the stock was $6 million. After subtracting out any applicable taxes due on the gain ($600,00), ZonTech’s net cash inflow from this transaction would be $5.4 million ($6 million less $600k in taxes). This represents an increase in liquidity for ZonTech and can be used to help fund future investments or operations.
Overall this successful stock sale generated a significant capital influx for ZonTech and resulted in a gain recognition of two million dollars. This additional working capital will help enable them to pursue other opportunities while also providing them with additional financial flexibility.