The corporate charter of Maine Yacht Corporation allows the issuance of a maximu

Question

The corporate charter of Maine Yacht Corporation allows the issuance of a maximum of 3,000,000 shares of $1 par value common stock. During its first three years of operation, Maine issued 2,200,000 shares at $15 per share. It later acquired 30,000 of these shares as treasury stock for $25 per share. Based on the above information, answer the following questions: How many shares were authorized? Authorised shares shares How many shares were issued? Shares issued shares How many shares are outstanding? Outstanding shares shares What is the balance of the Common Stock account? Balance of the Common Stock account $ What is the balance of the Treasury Stock account? Balance of the Treasury Stock account $

Explanation / Answer

1. 3,000,000 shares were authorized.

2. 2,200,000 shares were issued.

3. Shares Outstanding = 2,200,000 - 30,000 = 2,170,000

4. The balance of the Common Stock account is = $1 × 2,200,000 shares = $2,200,000

5. The balance of the Treasury Stock account is = $25 × 30,000 shares = $750,000

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