 Hello, in this lecture, we're going to work some test type problems, problems that could be small enough to fit into multiple choice type questions. So what we have here, first one, the following data were reported by a corporation. We have authorized shares, 22,000 issued shares, 17,000 treasury shares, 4,000. The number of outstanding shares is what? So in order to figure this out, we need to know what the difference is between authorized shares, issued shares, treasury shares, authorized shares being the number of shares that could be issued, issued shares being the number of shares that have actually been issued, treasury shares being the amount that the company has actually purchased back. So if we want to see what's outstanding, what's out in the market at this point, we're going to have to take the issued shares, those are the ones that have been issued at some point in time and subtract from that the treasury shares because we issued the 17, then we bought some of them back and so we bought back these 4,000 and therefore, let's type that in this way, and therefore if we subtract that out and we had the 17 originally issued, we bought back four, how many are outstanding meaning how many are out in the market, 13,000 shares. Next one says the following data have been collected on a company stockholders equity accounts. So we have the common stock, $10 par value, 28,000 shares authorized, 14,000 shares issued, 1,008 shares outstanding. So this is basically how this would be represented on the stockholders equity section. We have to have the par value, if there is a par value, the shares authorized, that's what they could have issued, the shares that were issued, and then we have the 1,008 shares that are actually outstanding. So if we take then the paid in capital, that represents the amount of money that was paid for the stocks over the par value on the original issuance of the stock, then we have the retained earnings, that represents the accumulation of revenue. So notice that the retained earnings is basically kept separate, the retaining of earnings, the accumulation of revenue is kept separate from basically the investment, which is what the common stock is when the investors, owners buy stock, they're investing in the company, treasury stock being what we purchase, what we purchase back from the company. So we can see this, we see that we have the 14,000 shares issued, which is of course also the 140 divided by 10. So that's the 14,000 shares, because they're issued at par value, which is an arbitrary numbers, we got 14,000 issued. And then we have 1,800 shares outstanding. So if we issued 14, and we only have 1,800 outstanding, the difference must be the treasury stock, must be what we then purchased back from the amount of shares that we had originally issued. So then we're just going to subtract that out. So we're going to say that we have the 14,000 minus the 1,008 means that we must have purchased back 12,200 shares in the form of treasury stock, and we must have paid 22,140 for those shares. Next one says that a company has 43,000 shares of common stock outstanding, the stock holders equity are applicable to the common shares is 1,511,700 and 511,700. And the par value per common share is $10. The book value per share is what? So what we're trying to do is get the book value per share. So we're going to take the amount of equity, which is the 511,700 applied to the common stock. So we're trying to say this is the equity, meaning the equity is basically the book value of the company as a whole, because assets minus liabilities equals the equity. This is the equity attributed attributable to the common stock holders, the investors that hold common stock, the owners. And we're going to divide that by the number of shares because we're trying to figure out how much of that book value, how much of that equity, how much of that value of the company should be applicable to each individual common stock. And note that more than one person can hold more than one common stock. So we have 43,000 shares outstanding. And we're going to say that this equals the 511,700 divided by the 43,000 shares. I'm going to add some decimals to see if there are any home tab numbers group, add decimals, we come out to $11.90. Now you might be saying, well, why isn't it just the par value here? And just remember that that par value, completely arbitrary number, we just came up with a par value to simplify basically the sameness of the stocks that would be represented in the equity section doesn't represent the real value of the stocks in any way. This is a better approximation of the value of the stocks taking the equity section divided by the number of shares out there. Next one says that a corporation has declared and issued a 25% stock dividend on October 1st. The following information was available immediately prior to the dividend retained earnings, 820,000 shares issued and outstanding, 67,000 market value per share $22 par value per share $5. The amount that contributed capital will increase decrease as a result of recording this stock dividend. So instead of issuing a cash dividend, remember that a dividend is like a draw basically for a sole proprietor in which case the owner is getting payment from the company. Unlike a sole proprietor, the dividend is not something that the stockholder can do on their own. They have to be issued from the company whereas in a sole proprietor of course the owner can take the draw out whenever they feel but the idea that the dividend is giving from the retained earnings of the company to the owner, the owner in the case of a corporation of course being the stockholder. In this case they're going to issue stocks rather than cash and that's what we're going to have to basically issue it's going to increase the equity section. So if we take the shares outstanding at this time shares outstanding we have the 67,000. We are going to issue a 25% increase 0.25 if we move the decimal over two places 25% going to the home tab going to the numbers we could increase decimals like so or make it a percent. I'm going to go ahead and underline that home tab font group underline and that means that we're going to have 67,000 times a 25% increase that we're going to issue another 16,750 in stock dividends that's how many stocks that will be issued and if they maintain those stocks at a market value of $22 then we're going to say $22 and I'm going to go ahead and underline that home tab font group underline and we multiply that out we're going to say we have another 16,750 shares at $22 means that we have another 368,500 that will be contributed capital as a result of the stock dividend.