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: Multiple Choice $1.15. $1.28. $11.50. $10.50. $10.00.

Answer 1

$11.50

Step-by-step explanation:

The computation of cost per share of the treasury stock is shown below:-

The outstanding shares are 9,000, while the issued shares are 10,000.

That means bringing back 1,000 shares as Treasury Stock.

Cost per share of the treasury stock = Treasury stock ÷ (Issued shares - Shares outstanding)

= $11,500 ÷ (10,000 - 9,000)

= $11,500 ÷ 1,000

= $11.50

Therefore for computing the Cost per share of the treasury stock we simply applied the above formula.