Question

On January 1, 2018, R Corp. had 480000 shares of common stock outstanding. During 2018, the following transactions affected the common stock account: 2/1/208 issued 120000 shares. 5/1/208 acquired 100000 shares of treasury stock. 6/1/2018 issued a 3-for-1 stock split. 10/1/2018 reissued 60000 shares of treasury stock ( not adjusted for dividend or split). a) Determine the weighted-average number of shares outstanding as of December 31, 2018. b) Assume that Wilke Corp. earned net income of $3456000 during 2018, determine basis EPS

Answer 1

1	Event	Dates Outstanding	Shares outstanding	Restatement	Fraction of year	Weighted shares
	Beginning balance	Jan. 1–Feb. 1	480,000	1.1 x 3.0	1/12	132,000
	Issued shares	Feb. 1–Mar. 1	600,000	1.1 x 3.0	3/12	495,000
	Reacquired shares	May 1–June 1	500,000	3.0	1/12	125,000
	Stock split	June 1–Oct. 1	1,500,000		4/12	500,000
	Reissued shares	Oct. 1–Dec. 31	1,560,000		3/12	390,000
			Weighted average number of shares outstanding			1,642,000
2	EPS =	Net Income/Weighted Average Shares
	=	$3,456,000/1,642,000
	=	$2.10