Question

The following data has been collected about Keller Company's stockholders' equity accounts: Common stock $10 par value 20,000 shares authorized and 10,000 shares issued, 9,000 shares outstanding $100,000 Paid-in capital in excess of par value, common stock 50,000 Retained earnings 25,000 Treasury stock 11,500 Assuming the treasury shares were all purchased at the same price, the cost per share of the treasury stock is:______.A. $10.50.B. $10.00.C. $11.50.D. $1.15.E. $1.28.

Answer 1

Answer:

option (C) $11.50

Explanation:

Data provided in the question:

Common stock = 20,000

shares issued = 10,000

shares outstanding = 9,000

Paid-in capital in excess of par value = $100,000

common stock = 50,000

Retained earnings = 25,000

Value of Treasury stock = $11,500

Now,

Shares brought back as Treasury Stock

=  shares issued  - shares outstanding

=  10,000 - 9,000

= 1,000

therefore,

The cost per share of the treasury Stock

= ( Value of Treasury stock ) ÷ ( Shares brought back as Treasury Stock )

= $11,500 ÷ 1000

= $11.50

Hence,

The correct answer is option (C) $11.50