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Equity Accounts

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Equity Accounts. The authorized share capital of the Alfred Cake Company is 100,000 shares. The equity is currently shown in the company's books as follows:

Common stock ($1.00 par value) $60,000
Additional paid-in capital 10,000
Retained earnings 30,000
Common equity 100,000
Treasury stock (2,000 shares) 5,000
Net common equity 95,000

a. How many shares are issued?
b. How many are outstanding?
c. How many more shares can be issued without the approval of shareholders?

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Solution Summary

The solution explains how to calculate how many shares are issued, how many are outstanding and how many more shares can be issued without the approval of shareholders using the balance sheet of Alfred Cake Company.

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a. The total common stock is $60,000 and the par value is $1. The number of shares issued would be 60,000/1 = 60,000.

b. The shares that have been ...

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