The following data has been collected about Keller Company's stockholders' equity accounts: $\begin{array}{lr}
\text { Common stock } \$ 10 \text { par value } 20,000 \text { shares } & \$ 100,000 \
\text { authorized and } 10,000 \text { shares issued, } 9,000 \text { shares outstanding } & \
\text { Paid-in capital in excess of par value, common stock } & 50,000 \
\text { Retained earnings } & 25,000 \
\text { Treasury stock } & 11,500
\end{array}$

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Assuming the treasury shares were all purchased at the same price, the number of shares of treasury stock is:

Question

The following data has been collected about Keller Company's stockholders' equity accounts: $\begin{array}{lr}
\text { Common stock } \$ 10 \text { par value } 20,000 \text { shares } & \$ 100,000 \
\text { authorized and } 10,000 \text { shares issued, } 9,000 \text { shares outstanding } & \
\text { Paid-in capital in excess of par value, common stock } & 50,000 \
\text { Retained earnings } & 25,000 \
\text { Treasury stock } & 11,500
\end{array}$

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Assuming the treasury shares were all purchased at the same price, the number of shares of treasury stock is:

Quizplus · Accepted Answer

The total amount of common stock issued is 10,000 shares and the outstanding common stock is 9,000 shares. Therefore, the company has repurchased 1,000 shares of common stock ($10 par value x 1,000 shares = $10,000). Since the amount of treasury stock is $11,500, the purchase price of each share of treasury stock is $11.50 ($11,500 ÷ 1,000 shares = $11.50 per share). Therefore, the number of shares of treasury stock is calculated by dividing the total amount of treasury stock by the purchase price per share ($11,500 ÷ $11.50 per share = 1,000 shares). Hence, the correct answer is option C).

The Following Data Has Been Collected About Keller Company's Stockholders