CGJ Company Has Provided the Following

question 26

Multiple Choice

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.

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Definitions:

Net Exchange Gain

The profit from exchanging one currency for another after accounting for currency fluctuations and transaction costs.

Forward Contract

A tailor-made agreement between two entities to purchase or sell a specific asset at a predetermined price on a future date.

Forward Contract

A financial contract between two parties to buy or sell an asset at a specified future time at a price agreed upon today, not traded on an exchange.

Exchange Gain

A profit resulting from foreign currency transactions when the value of the currency received is higher than the value of the currency exchanged at the transaction rate.