Question

The balance sheet caption for common stock is the following: Common stock, $5 par value, 2,550,000 shares authorized, 1,120,000 shares issued, 1,150,000 shares outstanding$?Required:Calculate the dollar amount that will be presented opposite this caption.Calculate the total amount of a cash dividend of $0.21 per share.What accounts for the difference between issued shares and outstanding shares?

Answer 1

Answer:

- Shares Authorized is $12750000

 Shares Issued is $5600000

 Shares Outstanding is $5750000

- Amount of total dividend is $138,000  

- issued shares are out of those authorized shares which are issued for          cash but, outstanding shares are those issued shares on which   amount has been received.

Outstanding shares can not increase from Issued shares, but issued shares may be more than outstanding shares.

Explanation:

amount presented opposite this caption:

Shares Authorized = 2,550,000*5

                               = $12750000

Shares Issued = 1,120,000*5

                 = $5600000

Shares Outstanding = 1,150,000*5

                           = $5750000

Shares Outstanding = 1,150,000    

Cash dividend per share = 0.12    

Amount of total dividend = $138,000

issued shares are out of those authorized shares which are issued for cash but, outstanding shares are those issued shares on which amount has been received.

Outstanding shares can not increase from Issued shares, but issued shares may be more than outstanding shares.