Question

The following data is available for Santos Service Corporation at December 31, 2017: Common stock, par $10 (authorized 100,000 shares) $400,000 Treasury Stock (at cost $15 per share) $ 27,000 Based on the data, how many shares of common stock are outstanding

Answer 1

Answer:

the number of shares of common stock outsanding is 38,200 shares

Explanation:

The computation of the number of shares of common stock outsanding is as follows:

= Common shares - treasury stock

= ($400,000 ÷ $10)  - ($27,000 ÷ $15)

= 40,000 shares - 1,800 shares

= 38,200 shares

hence, the number of shares of common stock outsanding is 38,200 shares

Answer 2

The total no. of outstanding stock for the Santos Sales Corporation is 38200 shares which is calculated by simply applying values to the formula in the equation.

Share is defined as a share in the share capital authorized by the company and shares also include stocks. The distinction between shares and stocks is implied expressively in the share capital of the company which issues such shares.

• The stock outstanding in the share capital of Santos Service Corporation as on 31st December 2017 will be calculated using the formula of Total shares outstanding as given below.

$Total\ shares\ outstanding = Issued\ stock- Treasury\ stock$

• To calculate the no. of shares we can calculate them as for treasury stock there are shares worth $27000 and cost of each stock is $15.

$Treasury\ stock = \frac{27000}{15} = 1800\ shares$

• And the issued share capital is $400000 at a face value of $10 each

$Issued\ capital=\frac{400000}{10} = 40000$

• Now putting the obtained values in the formula, we get

$Total\ shares\ outstanding =40000-1800$

• So, the value obtained is as 38200 shares outstanding.

Hence, there are 38200 common stock outstanding at the end of Santos Service Corporation.

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