Bates Ltd has 6 000 000 ordinary shares on issue at the beginning of the year,1 July 2013.These shares were issued at $4.00 each and have a current market value of $6.25.On 1 February 2014,Bates Ltd bought back 300 000 ordinary shares originally issued at $4.50 for $5.60 each.On 1 May 2014,1 000 000 fully paid-up shares were issued at the current market value.What is the weighted-average number of shares calculated in accordance with AASB 133?

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Quizplus · Accepted Answer

The weighted-average number of shares is calculated by multiplying the number of shares by the number of days they were outstanding during the year, and then dividing by the total number of days in the year.For Bates Ltd, the number of shares outstanding at the beginning of the year was 6,000,000. On 1 February 2014, the company bought back 300,000 shares, so the number of shares outstanding decreased to 5,700,000. On 1 May 2014, the company issued 1,000,000 new shares, so the number of shares outstanding increased to 6,700,000.The number of days that the original 6,000,000 shares were outstanding was 243 (from 1 July 2013 to 31 January 2014). The number of days that the 300,000 shares that were bought back were outstanding was 90 (from 1 February 2014 to 30 April 2014). The number of days that the 1,000,000 new shares were outstanding was 122 (from 1 May 2014 to 30 June 2014).Therefore, the weighted-average number of shares is:(6,000,000 x 243) + (300,000 x 90) + (1,000,000 x 122) / 365 = 6,059,452

Bates Ltd Has 6 000 000 Ordinary Shares on Issue