Charlotte Engineering had net income of $450,000 for the year. It declared $30,000 in preferred dividends on December 23. It began the year with 600,000 common shares outstanding. On July 1, Charlotte declared a 10% common stock dividend. Compute the weighted-average common shares outstanding for the year.

Question

Quizplus · Accepted Answer

The weighted-average common shares outstanding is calculated by adjusting for the stock dividend. The 10% stock dividend increases the shares by 60,000 (10% of 600,000), resulting in 660,000 shares.

Charlotte Engineering Had Net Income of $450,000 for the Year