RKJ Company has provided the following: • 100,000 shares of $5 par value common stock are authorized
• 70,000 shares were issued for $9 per share
• 65,000 shares are outstanding
Which of the following statements is correct based only on the above facts?
A) Common stock is reported at $630,000 on the balance sheet.
B) Additional-paid in capital is reported at $260,000 on the balance sheet.
C)Common stock is reported at $350,000 on the balance sheet.
D)Treasury stock is reported at $45,000 on the balance sheet.

Question

Quizplus · Accepted Answer

Total par value of common stock = 65,000 shares × $5 par value = $325,000
Common stock is reported on the balance sheet at its par value, so it is reported at $325,000.
Additional paid-in capital = Total amount received from issuing stock – Total par value of stock issued
= (70,000 shares × $9 per share) – (70,000 shares × $5 par value)
= $630,000 – $350,000 = $280,000.
Therefore, option C is correct: Common stock is reported at $350,000 on the balance sheet.

RKJ Company Has Provided the Following: • 100,000 Shares of $5