Question

Beck Corp. issued 200,000 shares of common stock when it began operations in Year 1 and issued an additional 100,000 shares in Year 2. Beck also issued preferred stock convertible to 100,000 shares of common stock. In Year 3, Beck purchased 75,000 shares of its common stock and held it in treasury. At the end of Year 3, how many shares of Beck’s common stock were outstanding?

Answer 1

Answer:

225,000 shares of Beck’s common stock were outstanding

Explanation:

The computation of the outstanding common stock shares is given below:

= Issue of shares + Additional shares - Treasury stock

= 200,000 shares + 100,000 shares - 75,000 shares

= 225,000 shares

The treasury stock decreases the balance of common stock shares so we deduct it. The convertible preferred stock is not a part of outstanding common stock shares so it is not considered in the computation part.