Question

Rudd Corp. had 700,000 shares of common stock authorized and 300,000 shares outstanding at December 31, 2016. The following events occurred during 2017:January 31 Declared 10% stock dividendJune 30 Purchased 100,000 sharesAugust 1 Reissued 50,000 sharesNovember 30 Declared 2-for-1 stock splitAt December 31, 2017, how many shares of common stock did Rudd have outstanding?

Answer 1

Answer:

560,000 shares

Explanation:

As for the information provided, we have

Opening outstanding shares = 300,000

Add: Jan 31 issued 10 % stock dividend = 300,000 $\times$ 10% = 30,000

Total balance on Jan 31 = 330,000 shares

Less: June 30 purchased shares = (100,000)

Balance on June 30 = 230,000 shares

Add: Aug 1 Re-Issued shares = 50,000

Balance on 1 Aug = 280,000

Add: Nov 30 Split off for each share 1 more share = 280,000

Balance on 31 December 2017 = 560,000 shares.