Question

Marvin Corporation has the following information reported on the balance sheet as of December 31, 2017 Common Stock, $10 par value (authornized 20,000 shares) $90,000 Treasury Stock (6,000 shares) $30,000 Based on the information above, how many shares of common stock are outstanding? O A. 9,000. B. 6,000. O C. 3,000 O D. 60,000 Click to select your answer O Type here to search

Answer 1

Answer:

• How many shares of common stock are outstanding?

C. 3,000

Explanation:

Treasury stock, are those that the company repurchase from the market and keep it in the company, in this case the company keep the shares in the accounting and the shares could be reissued in the future.

The company issued 9,000 shares, it is reflected in the Common Stock account,  $90.000 / $10 = 9,000.

Then in the Treasury Stock account are registered the shares that the company repurchases from the market, these are, 6,000 shares.

Finally the total Common Shares outstanding are 3,000.