On January 1, 2016, Wade 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 900 shares. What was the weighted average number of common shares outstanding for 2016?

Question

Quizplus · Accepted Answer

To calculate the weighted average number of shares, we need to account for the changes in the number of shares throughout the year and for how long each share count was in effect.1. From January 1 to March 31 (90 days), there were 24,000 shares.2. From April 1 to June 30 (91 days), after reacquiring 2,400 shares, there were 24,000 - 2,400 = 21,600 shares.3. From July 1 to September 30 (92 days), after issuing 10,800 shares, there were 21,600 + 10,800 = 32,400 shares.4. From October 1 to November 30 (61 days), after issuing another 9,600 shares, there were 32,400 + 9,600 = 42,000 shares.5. From December 1 to December 31 (31 days), after reacquiring 900 shares, there were 42,000 - 900 = 41,100 shares.Now, calculate the weighted average:- (24,000 shares * 90 days) / 366 days = 5,901.64- (21,600 shares * 91 days) / 366 days = 5,390.16- (32,400 shares * 92 days) / 366 days = 8,142.08- (42,000 shares * 61 days) / 366 days = 7,000.00- (41,100 shares * 31 days) / 366 days = 3,491.26Adding these together gives the weighted average number of shares for 2016:5,901.64 + 5,390.16 + 8,142.08 + 7,000.00 + 3,491.26 = 29,925.14, which rounds to 29,925.

On January 1, 2016, Wade Corporation Had 24,000 Shares of Common