On December 31, 2008, Albacore Company had 300,000 shares of common stock issued and outstanding. Albacore issued a 10% stock dividend on June 30, 2009. On September 30, 2009, 12,000 shares of common stock were reacquired as treasury stock. What is the appropriate number of shares to be used in the basic earnings per share computation for 2009?
A)303,000.
B)342,000.
C)312,000.
D)327,000.(300,000 1.10) (12,000 3/12) = 327,000

Question

Quizplus · Accepted Answer

The appropriate number of shares to be used in the basic earnings per share computation for 2009 is 327,000. This is calculated as (300,000 x 1.10) - (12,000 x 3/12). The 10% stock dividend increases the number of shares to 330,000, and the 12,000 treasury shares reduce the number of shares to 327,000.

On December 31, 2008, Albacore Company Had 300,000 Shares of Common