On January 1, 2014, Jerry Co. had 25,000 shares of common stock outstanding. On April 1, 2014 it had a 10% stock dividend. On October 1, 2015 it had a 4:1 stock split.
Required:
a.Determine the weighted average common stock outstanding used in the basic earnings per share computation at 12/31/2014.
b.Determine the weighted average common stock outstanding used in the basic earnings per share computation at 12/31/2015.
c.Jerry will be issuing comparative financial statements for 2014 and 2015. What number of shares should be used in the earnings per share computation for 2014 and 2015? Why?

Question

On January 1, 2014, Jerry Co. had 25,000 shares of common stock outstanding. On April 1, 2014 it had a 10% stock dividend. On October 1, 2015 it had a 4:1 stock split.
Required: 
a.Determine the weighted average common stock outstanding used in the basic earnings per share computation at 12/31/2014.
b.Determine the weighted average common stock outstanding used in the basic earnings per share computation at 12/31/2015.
c.Jerry will be issuing comparative financial statements for 2014 and 2015. What number of shares should be used in the earnings per share computation for 2014 and 2015? Why?

Quizplus · Accepted Answer

The Answer of On January 1, 2014, Jerry Co. had 25,000 shares of common stock outstanding. On April 1, 2014 it had a 10% stock dividend. On October 1, 2015 it had a 4:1 stock split.
Required: 
a.Determine the weighted average common stock outstanding used in the basic earnings per share computation at 12/31/2014.
b.Determine the weighted average common stock outstanding used in the basic earnings per share computation at 12/31/2015.
c.Jerry will be issuing comparative financial statements for 2014 and 2015. What number of shares should be used in the earnings per share computation for 2014 and 2015? Why?