Question

The 2016 annual report for Mega Mills disclosed that 1 billion shares of common stock have been authorized. At the end of 2015, 760 million shares had been issued and the number of shares in treasury stock was 101 million. During 2016, the only common share transactions were that 18 million common shares were reissued from treasury and 24 million common shares were purchased and held as treasury stock.Required: Determine the number of common shares a. Issued b. In treasuryc. Outstanding at the end of 2016.

Answer 1

Answer:

a. 760 million shares

b. 107 million shares

c. 653 million shares

Explanation:

a. The number of Issued stock is unchanged because Issued stock encompasses both outstanding and treasury stock.

b. Treasury Stock = Beginning balance - Reissued from treasury + repurchased for treasury

= 101 - 18 + 24

= 107 million shares

c. Outstanding stock = Issued Stock - Treasury Stock

= 760 - 107

= 653 million shares