David Owns 600 Shares of K Corporation Stock When K

Multiple Choice

David owns 600 shares of K Corporation stock when K is merged into Parent Corporation.David receives 500 shares of Parent Corporation stock (fair market value = $10,500) and $500 cash in exchange for his K Corporation stock.David's K stock had a basis of $8,000 and an $11,000 fair market value.What is David's realized and recognized gain,respectively?

A) $3,000 and $3,000
B) $3,000 and $2,500
C) $2,500 and zero
D) $2,500 and $500
E) $3,000 and $500