Asked by Dustin Politte on Apr 26, 2024
Verified
There would be 100,000 shares of common stock outstanding when the number of shares authorized was 150,000,issued shares totaled 120,000,and 20,000 shares were being held in the treasury.
Common Stock
Equity ownership in a corporation, representing a claim on its earnings and assets.
Outstanding
Refers to shares that are currently owned by investors, including restricted shares owned by the company's officers and insiders.
Authorized
Authorized refers to the maximum number of shares a corporation is legally permitted to issue, as specified in its charter.
- Identify how stock transactions affect stockholders' equity.
- Distinguish between authorized, issued, and outstanding shares of stock.
Verified Answer
CC
carlos cabreraMay 01, 2024
Final Answer :
True
Explanation :
The number of outstanding shares is calculated by subtracting the shares held in treasury from the issued shares, so 120,000-20,000=100,000. The fact that the number of authorized shares is 150,000 is irrelevant to this calculation.
Learning Objectives
- Identify how stock transactions affect stockholders' equity.
- Distinguish between authorized, issued, and outstanding shares of stock.
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