Question

On January 1, 2021, Windsor Corp. had 465,000 shares of common stock outstanding. During 2021, it had the following transactions that affected the Common Stock account.

February 1		Issued 126,000 shares
March 1		Issued a 10% stock dividend
May 1		Acquired 102,000 shares of treasury stock
June 1		Issued a 3-for-1 stock split
October 1		Reissued 61,000 shares of treasury stock

Determine the weighted-average number of shares outstanding as of December 31, 2021.

The weighted-average number of shares outstanding

enter the weighted-average number of shares outstanding as of December 31, 2018

eTextbook and Media

  

  

Assume that Windsor Corp. earned net income of $3,512,000 during 2021. In addition, it had 99,000 shares of 9%, $100 par nonconvertible, noncumulative preferred stock outstanding for the entire year. Because of liquidity considerations, however, the company did not declare and pay a preferred dividend in 2021. Compute earnings per share for 2021, using the weighted-average number of shares determined in part (a). (Round answer to 2 decimal places, e.g. $2.55.)

Earnings Per Share

$enter earnings per share rounded to 2 decimal places

eTextbook and Media

  

  

Assume the same facts as in part (b), except that the preferred stock was cumulative. Compute earnings per share for 2021. (Round answer to 2 decimal places, e.g. $2.55.)

Earnings Per Share

$enter earnings per share rounded to 2 decimal places

eTextbook and Media

  

  

Assume the same facts as in part (b), except that net income included a loss from discontinued operations of $412,000 (net of tax). Compute earnings per share for 2021. (Round answer to 2 decimal places, e.g. $2.55.)

Windsor Corp. Income Statement choose the accounting period                                                                      December 31, 2021For the Year Ended December 31, 2021For the Quarter Ended December 31, 2021
select an opening name for this statement                                                                      DividendsExpensesExtraordinary LossExtraordinary GainIncome Before Extraordinary ItemIncome From Continuing OperationsIncome Per Share Before Extraordinary ItemLoss From Discontinued OperationsNet Income / (Loss)Retained Earnings, January 1Retained Earnings, December 31RevenuesTotal ExpensesTotal Revenues		$enter a dollar amount per share rounded to 2 decimal places
select an income statement item                                                                      DividendsExpensesExtraordinary LossExtraordinary GainIncome Before Extraordinary ItemIncome From Continuing OperationsIncome Per Share Before Extraordinary ItemLoss From Discontinued OperationsNet Income / (Loss)Retained Earnings, January 1Retained Earnings, December 31RevenuesTotal ExpensesTotal Revenues		enter a dollar amount per share rounded to 2 decimal places
select a closing name for this statement                                                                      DividendsExpensesExtraordinary LossExtraordinary GainIncome Before Extraordinary ItemIncome From Continuing OperationsIncome Per Share Before Extraordinary ItemLoss From Discontinued OperationsNet Income / (Loss)Retained Earnings, January 1Retained Earnings, December 31RevenuesTotal ExpensesTotal Revenues		enter a total earnings per share amount rounded to 2 decimal places

Answer 1

a) Calculation of Weighted average number of shares

	Date outstanding	No. of shares	Stock dividend restatement	Stock split restatement	Fraction of year	Weighted average shares
Beginning balance	Jan 1-Feb 1	465000	1.10	3	1/12	127875
Issued shares	Feb 1-Mar 1	(465000+126000)= 591000	1.10	3	1/12	162525
Stock dividend	Mar 1-May 1	(591000*1.10)= 650100	-	3	2/12	325050
Reacquired shares	May 1-June 1	(650100-102000)= 548100	-	3	1/12	137025
Stock split	June 1-Oct 1	(548100*3)= 1644300	-	-	4/12	548100
Reissued shares	Oct 1-Dec 31	(1644300+61000)= 1705300	-	-	3/12	426325
Weighted average number of shares						1726900

b) Earning per share= Net income/Weighted average number of shares

= $3512000/1726900= $2.03 per share

Earnings per share

$2.03

c) Preferred dividend= 99000*$100*9%= $891000

Earning per share= (Net income-Preferred dividend)/Weighted average number of shares

= ($3512000-891000)/1726900= $1.52 per share

Earnings per share

$1.52

d)

Windsor Corp.
Income Statement
For the Year Ended December 31, 2021
Income From Continuing Operations (3512000+412000)/1726900	$2.27
Loss From Discontinued Operations (412000/1726900)	-0.24
Net Income /(Loss)	$2.03

NOTE:- Please rate the answer and for any problem regarding the answer please ask in the comment section.