Additional Exercise 08 The corporate charter of Torres Corporation allows the is
ID: 2600145 • Letter: A
Question
Additional Exercise 08
The corporate charter of Torres Corporation allows the issuance of a maximum of 4,000,000 shares of $1 par value common stock. During its first three years of operation, Torres issued 2,080,000 shares at $15 per share. It later acquired 80,000 of these shares as treasury stock for $25 per share.
Based on the above information, answer the following questions:
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What is the balance of the Treasury Stock account?
Additional Exercise 08
The corporate charter of Torres Corporation allows the issuance of a maximum of 4,000,000 shares of $1 par value common stock. During its first three years of operation, Torres issued 2,080,000 shares at $15 per share. It later acquired 80,000 of these shares as treasury stock for $25 per share.
Based on the above information, answer the following questions:
Explanation / Answer
Answer a.
Number of Authorized Shares = 4,000,000
Answer b.
Shares Issued = 2,080,000 shares
Answer c.
Shares outstanding = Shares Issued - Shares repurchased
Shares outstanding = 2,080,000 - 80,000
Shares outstanding = 1,280,000
Answer d.
Balance of Common Stock Account = Par Value of Shares issued
Balance of Common Stock Account = $1 * 2,080,000
Balance of Common Stock Account = $2,080,000
Answer e.
Balance of Treasury Stock Account = Value of Treasury Stock
Balance of Treasury Stock Account = 80,000 * $25
Balance of Treasury Stock Account = $2,000,000
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