The Eaton Company was incorporated July 10, 1999, with authorized capital as follows:

a. Common stock. Class A, 20,000 shares, par value $25 per share.

b. Common stock. Class B, 100,000 shares, par value $5 per share.

The capital stock account in the general ledger is credited with only one item in the year 1999—capital stock sold for cash, at par—as follows:

a. Class A, 12,000 shares.

b. Class B, 60,000 shares.

The sum of open certificate stubs in the stock certificate books at December 31, 1999 indicates that 82,000 shares of stock were outstanding.

Required:

1. Explain the discrepancy.

2. What procedures would you perform to determine the cause of the discrepancy?