Walton Corporation shows the following in the stockholders' equity section of its balance sheet: The stated value of its common stock is $0.50 and the total balance in the common stock account is $37,500. Also noted is that 5,000 shares are currently designated as treasury stock. The number of shares outstanding is

a. 80,000.

b. 75,000.

c. 72,500.

d. 70,000.

Question

Business

Demetrius Taylor

23 July, 05:46

Walton Corporation shows the following in the stockholders' equity section of its balance sheet: The stated value of its common stock is $0.50 and the total balance in the common stock account is $37,500. Also noted is that 5,000 shares are currently designated as treasury stock. The number of shares outstanding is

a. 80,000.

b. 75,000.

c. 72,500.

d. 70,000.

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Answers (1)

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Tabitha Schroeder · Answer 1

The answer is d. 70,000

Explanation:

The common stock account has the balance of 37,500 while stated value of a common stock is $0.50 = > Common stock issued is 37,500/0.5 = 75,000 shares.

The treasury stock account presents the balance of 5,000 common shares; which is the amount of common stocks hold by Walton Corporation through repurchase transaction which will decreased the number of stock outstanding.

Thus, the number of common shares outstanding = number of common shares issued - number of common shares in treasury stock account = 75,000 - 5,000 = 70,000 common shares.

Thus the answer is d. 70,000.