Question

The following data has been collected about Keller Company's stockholders' equity accounts:

*Common stock $10.00 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 number of treasury stock is

a. 1,150
b. 1,000
c. 575
d. 11,000
e. 675

Answer 1

The number of treasury stock for Keller Company is 1,000 shares, which corresponds to option b. Each treasury share was bought at $11.50, calculated by dividing the total treasury stock value of $11,500 by the number of treasury shares.

Step-by-step explanation:

The student has presented data about Keller Company's stockholders' equity accounts and needs to determine the number of treasury stock shares based on the given values. With 10,000 shares issued and 9,000 shares outstanding, that implies 1,000 shares have been bought back by the company as treasury stock. Given the treasury stock value of $11,500, if we assume all treasury shares were purchased at the same price, we can calculate the price per share by dividing the total treasury stock value by the number of treasury shares. This calculation confirms that each treasury share was bought at $11.50 ($11,500 / 1,000 shares). Therefore, the number of treasury stock is 1,000, which is option b.