Home › ACCA › Financial Accounting › Treasury Shares and Equity Section › A corporation has 10,000 ordinary shares issued …
A corporation has 10,000 ordinary shares issued and outstanding, then repurchases 1,000 shares as treasury shares. How many shares are issued and how many are outstanding after the repurchase?
A9,000 issued and 9,000 outstanding
B10,000 issued and 9,000 outstanding
C10,000 issued and 10,000 outstanding
D9,000 issued and 10,000 outstanding
Answer & Solution
Correct answer: B. 10,000 issued and 9,000 outstanding
1. Repurchasing treasury shares does not change the number of shares ever issued.
2. Issued stays at 10,000.
3. Outstanding = issued − treasury = $10{,}000 − 1{,}000 = 9{,}000$.
4. So 10,000 issued and 9,000 outstanding.
_Source: Jonick, Principles of Financial Accounting (CC BY-SA 4.0), §6.4 "Treasury Stock", p.251_
Related questions
Total shareholders' equity equals total paid-in capital plus retained earnings, less whichTreasury shares costing $45 per share are resold at $40 per share for 200 shares, with a $Treasury shares that originally cost $45 per share are resold at $60 per share for 200 shaUnder the cost method, a corporation purchases 1,000 treasury shares at $45 per share. WhaHow are treasury shares classified within the financial statements?