The following data was collected from Keller’s equity accounts: Common stock $10 par value 20,000 shares authorized and 10,000 shares issued, 9,000 shares outstanding $100,000 Contributed capital greater than par value , ordinary shares 50,000 Retained earnings 25,000 Treasury shares 11,500 Assuming the treasury shares were all purchased at the same price, the number of treasury shares is:
Answer 1
option (C) $11.50 Explanation: Data provided in question:
Common Stock = 20,000 Shares Issued = 10,000 Shares Outstanding = 9,000 Paid In Capital Above Par Value = $100,000 Common Stock = 50,000 Retained Earnings = 25,000 Treasury Stock Value = $11,500 Shares Now treasury shares = shares issued – shares outstanding = 10,000 – 9,000 = 1,000, therefore, The cost per share of treasury shares = (Value of treasury shares) ÷ (Shares treasury shares) = $11,500 ÷ 1000 = 11 $50 The correct answer is therefore option (C) $11.50