QQuestionAccounting
QuestionAccounting
The following data were reported by a corporation:
Authorized shares: 39,000
Issued shares: 34,000
Treasury shares: 13,000
The number of outstanding shares is:
A. 39,000
B. 21,000
C. 26,000
D. 52,000
E. 34,000
12 months agoReport content
Answer
Full Solution Locked
Sign in to view the complete step-by-step solution and unlock all study resources.
Step 1:Let's solve this step by step:
Step 2:: Understand the definitions
- Authorized shares: The maximum number of shares a company can issue according to its corporate charter - Issued shares: The total number of shares that have been issued by the company - Treasury shares: Shares that have been repurchased by the company from shareholders - Outstanding shares: Shares that are currently held by shareholders (not including treasury shares)
Step 3:: Calculate outstanding shares
\text{Outstanding Shares} = \text{Issued Shares} - \text{Treasury Shares}
The formula for outstanding shares is:
Step 4:: Plug in the numbers
\text{Outstanding Shares} = 34,000 - 13,000 = 21,000
Step 5:: Verify the calculation
- Issued shares: 34,000 - Treasury shares: 13,000 - 34,000 - 13,000 = 21,000 ✓
Final Answer
Key Insight: Outstanding shares represent the number of shares currently in the hands of shareholders, excluding shares repurchased by the company (treasury shares).
Need Help with Homework?
Stuck on a difficult problem? We've got you covered:
- Post your question or upload an image
- Get instant step-by-step solutions
- Learn from our AI and community of students