RKJ Company has provided the following: • 100,000 shares of $5 par value common stock are authorized
• 70,000 shares have been issued
• 65,000 shares are outstanding
Which of the following statements is correct?
A) RKJ has 35,000 shares of treasury stock.
B) RKJ has 30,000 shares of treasury stock.
C)RKJ can reissue an additional 35,000 shares of common stock.
D)RKJ can issue an additional 30,000 shares of common stock.

Question

Quizplus · Accepted Answer

RKJ has issued 70,000 shares out of the 100,000 authorized, so it can issue an additional 30,000 shares. The difference between issued and outstanding shares (5,000) represents treasury stock, not 30,000 or 35,000.

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