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16 January, 13:05

Question 7. The corporate charter of Gagne Corporation allows the issuance of a maximum of 100,000 shares of common stock. During its first 2 years of operation, Gagne sold 70,000 shares to shareholders and reacquired 4,000 of these shares. After these transactions, how many shares are authorized, issued, and outstanding?

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  1. 16 January, 13:10
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    Share Authorized = 100,000 Shares

    Share issued = 70,000

    Share outstanding = 66,000 shares

    Explanation:

    Data provided in the question:

    Number of shares Gagne Corporation allows the issuance = 100,000 shares

    Number of shares Gagne sold to shareholders = 70,000

    Number of shares reacquired by Gagne = 4,000

    Now,

    Share Authorized = Number of shares Gagne Corporation allows the issuance

    = 100,000 Shares

    Share issued = Number of shares Gagne sold to shareholders

    = 70,000

    Share outstanding = Shares issued - Number of shares reacquired

    = 70,000 - 4,000

    = 66,000 shares
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