Jimbo Co.began operations Jan.1, 2014.The following events related to common stock took place on the indicated dates during 2014. Jan.1 Issued 5,000 common shares
Apr)1 Purchased 400 treasury shares May 1 Split 2-for-1
Aug)1 Issued 2,000 common shares Dec.1 Issued a 20% stock dividend
Assuming no potentially dilutive securities, what are the weighted average shares for EPS in 2014? (Do not round intermediate calculations.Round your final answer to nearest whole number.)

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Quizplus · Accepted Answer

To calculate the weighted average shares for EPS in 2014, we follow these steps:1. **Jan 1:** Issued 5,000 shares. These shares are outstanding for the entire year, contributing 5,000 * 12/12 = 5,000 shares to the weighted average.2. **Apr 1:** Purchased 400 treasury shares, reducing shares to 4,600. However, for the weighted average calculation, these shares are considered for 9 months (Apr-Dec), so the reduction is 400 * 9/12 = 300 shares.3. **May 1:** A 2-for-1 stock split doubles the number of shares, so we adjust all previous calculations to reflect this. The initial 5,000 shares become 10,000, and the treasury shares adjustment becomes 600 (300 * 2). The shares are now 10,000 - 600 = 9,400 shares.4. **Aug 1:** Issued 2,000 shares, which are outstanding for 5 months. After the split, this is equivalent to 4,000 shares (since the split would have doubled any issuance before it took effect), contributing 4,000 * 5/12 = 1,667 shares to the weighted average.5. **Dec 1:** Issued a 20% stock dividend. This increases the number of shares by 20%. Before this dividend, the adjusted shares are 9,400 (from step 3) + 1,667 (from step 4) = 11,067. A 20% increase on 11,067 is 2,213 (rounded from 2,213.4), making the total 13,280. Since this dividend is issued at the end of the year, it's considered to be outstanding for the entire year.Therefore, the weighted average shares for EPS in 2014 are 13,280.

Jimbo CoBegan Operations Jan