Given the following sequence of events, determine the weighted average number of share for earnings per share purposes: January 1 100 common shares issued and outstanding April 1 issued 50 previously unissued shares
May 1 split the stock 2-for-1
June 30 purchased 100 shares for the treasury July 30 distributed a 20% stock dividend December 31 Split the stock 3-for-1

Question

Quizplus · Accepted Answer

The weighted average number of shares for earnings per share purposes is calculated as follows:January 1 - April 1: 100 shares x 3 months / 12 months = 25 sharesApril 1 - May 1: 150 shares x 1 month / 12 months = 12.5 sharesMay 1 - June 30: 300 shares x 2 months / 12 months = 50 sharesJune 30 - July 30: 200 shares x 1 month / 12 months = 16.67 sharesJuly 30 - December 31: 240 shares x 5 months / 12 months = 100 sharesDecember 31 - End of year: 720 shares x 1 month / 12 months = 60 sharesTotal weighted average number of shares = 25 + 12.5 + 50 + 16.67 + 100 + 60 = 264.17 sharesTherefore, the weighted average number of shares for earnings per share purposes is 264.17 shares, which is closest to choice A) 810.

Given the Following Sequence of Events, Determine the Weighted Average