Sherbrooke Ltd has 100,000 authorized shares and 80,000 issued shares. After it reacquires and retires 5,000 shares, it will have
A)105,000 authorized shares and 85,000 issued shares.
B)95,000 authorized shares and 80,000 issued shares.
C)100,000 authorized shares and 75,000 issued shares.
D)80,000 authorized shares and 75,000 issued shares.

Question

Quizplus · Accepted Answer

The number of authorized shares remains the same as it is not affected by the repurchase of shares. The number of issued shares will decrease by 5,000 to 80,000 - 5,000 = 75,000. Therefore, the correct option is C, which shows 100,000 authorized shares and 75,000 issued shares.

Sherbrooke Ltd Has 100,000 Authorized Shares and 80,000 Issued Shares