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Financial Accounting

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Shareholders' Equity: Outstanding Shares

FINACT-EB15JR

Orange Company was incorporated on January 1, 2016. The corporate charter authorized 20,000 shares of no par value common stock. Orange Company issued 5,000 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 2,000 shares from Jane for \$8,000. No other transactions relative to common stock took place in 2016 other than the transactions listed above.

How many common stock shares were outstanding at the end of 2016?

A

8,000 shares

B

10,000 shares

C

20,000 shares

D

2,000 shares