Cartman’s Cats had a total of 100,000 shares of common stock issued. In February, they reacquired 20,000 shares and did not retire them. How many shares of outstanding stock do they currently have?
Explanation
Answer: E - The corporation has 80,000 shares of outstanding stock.
Key Takeaway: If a corporation reacquires shares of its stock and does not retire them, those shares are called treasury stock. The outstanding number of shares is calculated by subtracting treasury shares from the number of issued shares:
Outstanding = Issued − Treasury
80,000 = 100,000 − 20,000
