CGJ Company has provided the following:
• 200,000 shares of $5 par value common stock are authorized
• 140,000 shares of common stock were issued for $11 per share
• 130,000 shares are outstanding
Which of the following statements is false?
A)Common stock is reported at $700,000 on the balance sheet.
B)Additional paid-in capital is reported at $840,000 on the balance sheet.
C)Stockholders' equity decreased $110,000 when the treasury stock was purchased.
D)There are 10,000 shares of treasury stock.

Question

CGJ Company has provided the following: 
• 200,000 shares of $5 par value common stock are authorized
• 140,000 shares of common stock were issued for $11 per share
• 130,000 shares are outstanding
Which of the following statements is false?
A)Common stock is reported at $700,000 on the balance sheet.
B)Additional paid-in capital is reported at $840,000 on the balance sheet.
C)Stockholders' equity decreased $110,000 when the treasury stock was purchased.
D)There are 10,000 shares of treasury stock.

Quizplus · Accepted Answer

Explanation:- A) True, because 140,000 shares issued at $5 par value equals $700,000 (140,000 shares * $5 par value).- B) True, because the shares were issued at $11, which is $6 above par value ($11 - $5 = $6), and for 140,000 shares, this equals $840,000 (140,000 shares * $6).- C) False, because the decrease in stockholders' equity due to treasury stock purchase is not directly provided, and without the cost at which the treasury stock was purchased, we cannot confirm the $110,000 figure.- D) True, because if 140,000 shares were issued and 130,000 are outstanding, 10,000 shares must be treasury stock (140,000 issued - 130,000 outstanding = 10,000 treasury).

CGJ Company Has Provided the Following