At January 1, 2013, Karpo Corporation had the following share capital: On July 1, 2013, the board of directors declared and paid a 10% common stock dividend. On October 1, 2013, the company sold an additional 20,000 common shares for proceeds of $280,000. The corporation earned $150,000 during the year and declared $30,000 in dividends to preferred shareholders.
-For the purpose of calculating the earnings per share, the company's weighted average number of common shares is
A) 30,000.
B) 12,750.
C) 7,750.
D) 15,500.

Question

At January 1, 2013, Karpo Corporation had the following share capital:  On July 1, 2013, the board of directors declared and paid a 10% common stock dividend. On October 1, 2013, the company sold an additional 20,000 common shares for proceeds of $280,000. The corporation earned $150,000 during the year and declared $30,000 in dividends to preferred shareholders.
-For the purpose of calculating the earnings per share, the company's weighted average number of common shares is
A) 30,000. 
B) 12,750. 
C) 7,750. 
D) 15,500.

Quizplus · Accepted Answer

The weighted average number of common shares is calculated by considering the time each share is outstanding during the period. The correct choice is based on the specific details of the company's share issuance and repurchase activities, which are not provided here. However, choice D is typically a plausible average for a company with fluctuating shares.

At January 1, 2013, Karpo Corporation Had the Following Share