Equity Accounts. The authorized share capital of the Alfred Cake Company is 100 000 shares. The

QUESTION

Equity Accounts. The authorized share capital of the Alfred Cake Company is 100,000 shares. The equity is currently shown in the companys books as follows: Common stock ($1.00 par value) $ 60,000 Additional paid-in capital 10,000 Retained earnings 30,000 Common equity 100,000 Treasury stock (2,000 shares) 5,000 Net common equity 95,000 a. How many shares are issued? b. How many are outstanding? c. How many more shares can be issued without the approval of shareholders?
Answer A Number of shares = Par value of stock /Par value per share Number of shares = $ 60,000/$ 1= 60,000 Answer B Outstanding Shares = Issued shares less treasury stock Outstanding shares = 60,000 less 2,000 = 58,000 Answer C

e firm can issue upto 100,000 shares. Till now, 60,000 shares have been issued, so, another 40,000 shares can be issued without approval from shareholders

ANSWER:

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