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he authorized share capital of the Alfred Cake Company is 100,000 shares. The equity is currently...

he authorized share capital of the Alfred Cake Company is 100,000 shares. The equity is currently shown in the company’s books as follows: Common stock ($2 par value) $ 63,000 Additional paid-in capital 13,000 Retained earnings 33,000 Common equity $ 109,000 Treasury stock (3,000 shares) 7,000 Net common equity $ 102,000

a. How many shares are issued?

b. How many shares are outstanding?

c. How many more shares can be issued without the approval of shareholders?

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Answer #1

Answer a.

Number of shares issued = Common stock / Par value per share
Number of shares issued = $63,000 / $2
Number of shares issued = 31,500

Answer b.

Number of shares outstanding = Number of shares issued - Number of repurchased
Number of shares outstanding = 31,500 - 3,000
Number of shares outstanding = 28,500

Answer c.

Number of shares can be issued = Number of shares authorized - Number of shares issued
Number of shares can be issued = 100,000 - 31,500
Number of shares can be issued = 68,500

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