During 2011 outstanding common shares of General Electric (GE) decreased from 10,615,376,000 to 10,537,017,000. GE declared dividends of $6,458,000,000. The treasury stock account had a beginning balance of $31,938,000,000 and an ending balance of $31,769,000,000. The total cost of purchases of treasury shares in 2011 was $2,067,000,000. During 2011 GE stock fluctuated substantially from a high of $21.65 in the first quarter to a low of $14.02 during the fourth quarter. Over the last few years, GE stock prices have been lower than the historical average. As recently as late 2007, the stock was selling near $40 per share. Assume that the average price of treasury stock purchased in 2011 was $17.68 per share and the average carrying value of treasury stock disposals was $30 per share.
1. Compute the carrying value of the treasury shares sold during 2011.
2. What was the net increase (or decrease) in number of treasury shares in 2011?
3. Comment on the decision to buy/sell treasury stock during the year.