Roberto Designers was organized on January 1, 2021. The firm was authorized to issue 100,000 shares of $5 par value common stock. During 2021, Roberto had the following transactions relating to stockholders equity:

Issued 10,000 shares of common stock at $7 per share.

Issued 20,000 shares of common stock at $8 per share.

Reported a net income of $100,000.

Paid dividends of $50,000.

Purchased 3,000 shares of treasury stock at S10 (part of the 20,000 shares issued at $3)

What is the balance in the Treasury Stock account at the end of 2021?

a) $160,000.

b) $30,000

c) $260,000.

d) $250,000.

Question

Business

Vance Gallegos

20 April, 10:30

Roberto Designers was organized on January 1, 2021. The firm was authorized to issue 100,000 shares of $5 par value common stock. During 2021, Roberto had the following transactions relating to stockholders equity:

Issued 10,000 shares of common stock at $7 per share.

Issued 20,000 shares of common stock at $8 per share.

Reported a net income of $100,000.

Paid dividends of $50,000.

Purchased 3,000 shares of treasury stock at S10 (part of the 20,000 shares issued at $3)

What is the balance in the Treasury Stock account at the end of 2021?

a) $160,000.

b) $30,000

c) $260,000.

d) $250,000.

+3

Answers (1)

Know the Answer?

Mark Adams · Answer 1

Option (b) $30,000

Explanation:

Data provided in the question:

shares of common stock issued @ $7 per share = 10,000

shares of common stock issued @ $8 per share = 20,000

Net income = $100,000

Dividend paid = $50,000

Number of treasury stocks purchased = 3,000

Price per stock of treasury stocks = $10

Now,

The balance in the Treasury Stock account at the end of 2021

= Number of treasury stocks purchased * Price per stock of treasury stocks

= 3,000 * $10

= $30,000

Hence,

Option (b) $30,000