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Financial Accounting

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Shareholders' Equity: Issued Shares

FINACT-JCRD3P

Orange Company was incorporated on January 1, 2016. The corporate charter authorized 50,000 shares of no par value common stock. Orange Company issued several of these shares to each of its shareholders (John and Jane Doe) on January 23, 2016 in exchange for \$10,000 cash from each of them. On December 15, 2016, Orange Company repurchased 12,000 shares from Jane for \$3,000. No other transactions relative to common stock took place in 2016 other than the transactions listed above.

If there are 28,000 shares outstanding at December 31, 2016, how many shares were issued to its shareholders on January 23, 2016?

A

10,000 shares

B

40,000 shares

C

28,000 shares

D

12,000 shares