Exercise 11-4A (Algo) Capital stock authorized, issued, and outstanding LO 11-2

Enscoe Enterprises, Incorporated (EEI) has 280,000 shares authorized, 250,000 shares issued, and 20,000 shares of treasury stock. At this point, EEI has $2,120,000 of assets. $280,000 liabilities, $540,000 of common stock, and $1,300,000 of retained earnings. Further, assume that the market value of EEI's common stock is $10 per share. Required a. Determine the number of shares of stock that is outstanding.

Shares outstanding

shares

b. Determine the book value per share.

Book value per share

c. Provide a rational explanation for the difference between the book value per share and the market value per share of EEI's common stock.

1.	Market value is		than the book value.
2.		is a measure of historical cost, while			is a measure of current values.