Please refer to the following information for Petra Sales Company:
• Common stock, $1.00 par, 200,000 issued, 180,000 outstanding
• Paid-in capital in excess of par: $1,600,000
• Retained earnings: $2,440,000
• Treasury stock: 20,000 shares purchased at $12 per share
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If Petra Sales sells 10,000 shares of treasury stock at $14 per share, the number of shares outstanding will go down by 10,000.

Question

Please refer to the following information for Petra Sales Company:
• Common stock, $1.00 par, 200,000 issued, 180,000 outstanding
• Paid-in capital in excess of par: $1,600,000
• Retained earnings: $2,440,000
• Treasury stock: 20,000 shares purchased at $12 per share
- 
If Petra Sales sells 10,000 shares of treasury stock at $14 per share, the number of shares outstanding will go down by 10,000.

Quizplus · Accepted Answer

Selling treasury stock does not affect the number of shares outstanding. The outstanding shares are only impacted by the number of issued shares that are not held as treasury stock.

Please Refer to the Following Information for Petra Sales Company