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Q.8 Multiple Choice During the year, Todd Corporation issued 200 shares of $20 par value common...

Q.8 Multiple Choice

During the year, Todd Corporation issued 200 shares of $20 par value common stock for $50 a share. A total of 500 shares were authorized. In addition, the company purchased 75 shares of treasury stock at $44 a share. Which of the following best presents the related lines in the stockholders’ equity section of the company’s balance sheet?

Multiple Choice

  • A
    Common stock, $20 par value, 500 shares authorized, 200 shares issued, 425 outstanding $ 8,500
    Paid in capital in excess of par - Common 11,050
    Less: Treasury stock, 75 shares @ $44 per share (3,300 )
  • B
    Common stock, $20 par value, 500 shares authorized, 200 shares issued, 125 outstanding $ 4,000
    Paid in capital in excess of par - Common 6,000
    Less: Treasury stock, 75 shares @ $44 per share (3,300 )
  • C
    Common stock, $50 market value, 500 shares authorized, 200 shares issued, 125 outstanding $ 10,000
    Less: Treasury stock, 75 shares @ $44 per share (3,300 )
  • D
    Common stock, $20 par value, 500 shares authorized, 200 shares issued and outstanding $ 4,000
    Paid in capital in excess of par - Common 6,000
    Less: Treasury stock, 75 shares @ $20 par (1,800 )
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Answer #1

Answer:

Common Stock authorized = 500 Shares
Common Stock issued = 200 Shares
Treasury Stock = 75 Shares
Common Stock Outstanding = 200 Shares – 75 Shares = 125 Shares

Value of Common Stock = 200 Shares * $20
Value of Common Stock = $4,000

Value of Paid-in Capital in excess of par – Common = 200 Shares * ($50 - $20)
Value of Paid-in Capital in excess of par – Common = $6,000

Value of Treasury Stock = 75 Shares * $44
Value of Treasury Stock = $3,300

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