Question

RKJ Company has provided the following: 100,000 shares of $5 par value common stock are authorized 66,000 shares were issued 61,000 shares are outstanding. Which of the following statements is correct based only on the above facts?

A) Additional-paid in capital is reported at $112,000 on the balance sheet.
B) Treasury stock is reported at $35,000 on the balance sheet.
C) Common stock is reported at $462,000 on the balance sheet.
D) Common stock is reported at $330,000 on the balance sheet.

Answer 1

Answer: D) Common stock is reported at $330,000 on the balance sheet.

Step-by-step explanation:

The value of the common stock in the balance sheet is calculated by:

= Shares issued * Par value

= 66,000 * 5

= $330,000

If the shares were sold for higher than the par value, the excess amount would go the Additional Paid-In capital.