On January 1, 2019, Warren Corporation had 500,000 shares of common stock outstanding. On Apr 1,...

On January 1, 2019, Warren Corporation had 500,000 shares of common stock outstanding. On Apr 1, the corporation issued 100,000 new shares to raise additional capital. On June 1, the corporation declared and issued a 2-for-1 stock split. On October 1, the corporation purchased on the market 300,000 of its own outstanding shares and retired them.

Instructions

Compute the weighted average number of shares to be used in computing earnings per share for 2019.

Expert Solution

	Increase / (decrease)	Outstanding	Months Outstanding		Share Months
Jan 1	-	500,000	3	2/1	3,000,000
Apr 1	100,000	600,000	2	2/1	2,400,000
June 1	600,000	1,200,000	4		4,800,000
Oct 1	(300,000)	900,000	3		2,700,000
					12,900,000

The weighted average number of shares			1,075,000
(12,900,000 ÷ 12)

ekkarill92 answered 2 years ago

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