RKJ Company Has Provided the Following Information: • 100,000 Shares

question 119

Multiple Choice

RKJ Company has provided the following information: • 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 resell 5,000 shares of common stock.
• D)RKJ can issue an additional 35,000 shares of common stock.

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Definitions:

Gross Profit Ratio

A financial metric expressing the gross profit as a percentage of net sales, indicating the efficiency of production or service delivery.

Inventory Destroyed

Refers to stock items that have been damaged, expired, or cannot be sold, leading to a loss for the business.

Typical Gross Profit

The average gross profit a company makes after subtracting the cost of goods sold from its net sales.

FOB Shipping

Free On Board Shipping, a term used in shipping agreements to specify which party (buyer or seller) pays for shipping costs and when the ownership of the goods transfers.