Starfish Co. issued 420,000 shares of common stock when it began operations in Year 1. In Year 2, Starfish issued an additional 110,000 shares of common stock and 80,000 shares of preferred stock (each preferred share is convertible into one share of common stock). In Year 3, 60 percent of the preferred shares were converted. At the end of Year 3, the firm had a 2 for 1 stock split. How many shares of common stock were outstanding at the end of Year 3? 1,156,000 O 578,000 O None of the other answers O 1,060,000 626,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Starfish Co. issued 420,000 shares of common stock when it began operations in Year 1. In
Year 2, Starfish issued an additional 110,000 shares of common stock and 80,000 shares of
preferred stock (each preferred share is convertible into one share of common stock). In Year
3, 60 percent of the preferred shares were converted. At the end of Year 3, the firm had a 2
for 1 stock split. How many shares of common stock were outstanding at the end of Year 3?
1,156,000
O 578,000
O None of the other answers
O 1,060,000
626,000
Transcribed Image Text:Starfish Co. issued 420,000 shares of common stock when it began operations in Year 1. In Year 2, Starfish issued an additional 110,000 shares of common stock and 80,000 shares of preferred stock (each preferred share is convertible into one share of common stock). In Year 3, 60 percent of the preferred shares were converted. At the end of Year 3, the firm had a 2 for 1 stock split. How many shares of common stock were outstanding at the end of Year 3? 1,156,000 O 578,000 O None of the other answers O 1,060,000 626,000
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