JUNK BONDS Inc.began operations Jan.1,2014.The following events related to common shares took place on the indicated dates during 2014. Jan.1 Issued 25,000 common shares
Apr)1 Purchased 4,000 treasury shares
May 1 Split the common shares 4-for-1
Aug)1 Issued 20,000 common shares
Dec)1 Issued a 25% stock dividend
Assuming no potentially dilutive securities,what is the weighted average shares for EPS in 2014?(Do not round intermediate calculations.Round your final answer to nearest whole number.)

Question

Quizplus · Accepted Answer

To calculate the weighted average number of shares outstanding for EPS, we need to take into account the changes in shares during the year.

Step 1: Calculate the weighted average shares for the period before the stock split (Jan 1 - Apr 30) 
Weighted average shares = 25,000 x (120 - 4) / 120 = 24,166.67

Step 2: Calculate the weighted average shares for the period after the stock split (May 1 - Dec 31) 
Weighted average shares = (24,166.67 x 4) + 20,000 + (20,000 x 25%) = 120,416.67

Step 3: Add the weighted average shares from Step 1 and Step 2 
Weighted average shares for 2014 = 24,166.67 + 120,416.67 = 144,583.34

Rounded to the nearest whole number, the answer is 120,416 shares (option C).