Montana Company was authorized to issue 200,000 shares of common stock. The company had issued 50,000 shares of stock when it purchased 10,000 shares of treasury stock. After the purchase of treasury stock, the number of outstanding shares of common stock was?

40,000 shares

Explanation:

Data provided as per the question below:-

Issued shares = 50,000

Treasury stock purchased = 10,000

The computation of the number of outstanding shares of common stock is shown below:-

Outstanding shares = Issued shares - Treasury stock purchased

= 50,000 - 10,000

= 40,000

Therefore for computing the outstanding shares we simply applied the above formula.