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8 February, 04:01

Harvey Corporation shows the following in the stockholders' equity section of its balance sheet: The par value of its common stock is $0.25 and the total balance in the Common Stock account is $50,000. Also noted is that 15,000 shares are currently designated as treasury stock. The number of shares outstanding is:

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  1. 8 February, 04:53
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    185,000 shares outstanding

    Explanation:

    First we get the value of the treasury stock

    = 15,000 x $0.25 = $3,750

    We know that treasury stock is the difference between shares issued and shares outstanding.

    So, to obtain the total value of shares outsanding, we simply substract the value of treasury stock from common stock:

    =$50,000 - $3,750

    =$46,250

    Now, we simply write the following equation to obtain the number of shares outstanding:

    46,250 = 0.25 * X

    X = 46,250 / 0.25

    X = 185,000
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