On January 1, a corporation had 20, 000 shares of common stock outstanding.An additional 4, 000 shares were issued on July 1, and on November 1, the company declared a 3-for-1 stock split.The denominator in the earnings per share calculation would be

Question

Quizplus · Accepted Answer

First, we need to calculate the total number of shares after the stock split. The stock split increased the number of shares by a factor of 3. So, the total number of shares after the split is:

20,000 + 4,000 = 24,000 (after July 1) 
24,000 x 3 = 72,000 (after November 1)

Therefore, the denominator in the earnings per share calculation would be 72,000.

On January 1, a Corporation Had 20, 000 Shares of Common