Given the following sequence of events,determine the weighted average number of shares 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

To calculate the weighted average number of shares, we need to take into account the number of shares outstanding during each period and the length of time they were outstanding.

January 1: 100 shares outstanding for 12 months = 1,200 shares
April 1: 50 shares outstanding for 9 months = 450 shares
May 1: 150 shares outstanding (after stock split) for 8 months = 1,200 shares
June 30: 50 shares outstanding (since 100 were purchased for treasury) for 6 months = 300 shares
July 30: 60 shares distributed (20% stock dividend) for 5 months = 100 shares
December 31: 180 shares outstanding (after stock split) for 1 month = 180 shares

Total weighted average number of shares = (1,200 + 450 + 1,200 + 300 + 100 + 180) / 12 = 810

Therefore, the best choice is D, 810 shares.

Given the Following Sequence of Events,determine the Weighted Average Number