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Sandra sold 500 shares of Wren Corporation to Bob, her brother, for its fair market value. She had paid $26,000 for the stock. Calculate Sandra's and Bob's gain or loss under the following circumstances:
a) Sandra sold the shares to Bob for $20,000. One year later, Bob sold them for $18,000.
b) Sandra sold the shares to Bob for $30,000. One year later, Bob sold them for $27,000.
c) Sandra sold the shares to Bob for $20,000. One year later, Bob sold them for $28,000.
How should this transaction be reported on the statement of cash flows
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