Question

Outstanding Stock Lars Corporation shows the following information in the stockholders' equity section of its balance sheet: The par value of common stock is $5, and the total balance in the Common Stock account is $225,000. There are 13,000 shares of treasury stock. Required: What is the number of shares outstanding? fill in the blank 1 shares

Answer 1

32,000 shares

Step-by-step explanation:

Note that the value of the treasury stock is usually deducted from the total stockholders' equity which means that in a bid to ascertain the number of shares outstanding we need to deduct the number of shares held in treasury stock.

The number of shares without treasury stock=common stock account balance/par value per share

The number of shares without treasury stock=$225,000/$5

The number of shares without treasury stock=45,000 shares

The number of shares considering treasury stock=45,000-13,000

The number of shares considering treasury stock=32,000