On January 1, 2010, Walters Corporation had 24, 000 shares of common stock outstanding.On April 1, it reacquired 2, 400 shares; on July 1, it issued 10, 800 shares; on October 1, it issued another 9, 600 shares; and on December 1, it reacquired 600 shares.The weighted average number of common shares outstanding for 2010 was

Question

Quizplus · Accepted Answer

Here are the calculations for each period:

- January 1 to March 31: 24,000 shares outstanding
- April 1 to June 30: 24,000 - 2,400 = 21,600 shares outstanding
- July 1 to September 30: 21,600 + 10,800 = 32,400 shares outstanding
- October 1 to November 30: 32,400 + 9,600 = 42,000 shares outstanding
- December 1 to December 31: 42,000 - 600 = 41,400 shares outstanding

To get the weighted average number of shares, we need to multiply the number of shares outstanding in each period by the fraction of the year that those shares were outstanding, and then add up the results:

(3/12 x 24,000) + (3/12 x 21,600) + (3/12 x 32,400) + (2/12 x 42,000) + (1/12 x 41,400) = 7,200 + 5,400 + 8,100 + 7,000 + 3,450 = 31,150

Therefore, the weighted average number of common shares outstanding for 2010 was 29,950 (total shares outstanding divided by the number of periods, or 31,150/5). The closest answer choice is C.

On January 1, 2010, Walters Corporation Had 24, 000 Shares