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The following information is available for a corporation: January 1st, 2020 Shares outstanding: 1,250,000 April 1,...

The following information is available for a corporation:

January 1st, 2020 Shares outstanding: 1,250,000

April 1, 2020 Shares Issued: 200,000

July 1, 2020 Purchased Treasury Stock 75,000

October 1, 2020 Issued a 2 for 1 stock split

The number of shares to be used in computing earnings per common share for 2020 is

A) 2,737,500

B) 2,825,500

C) 2,725,000

D) 1,706,250

Solutions

Expert Solution

--Correct Answer = Option 'C' 2,725,000 shares

Weighted average shares
Jan 1 Shares                   1,250,000 1250000*12/12
Apr 1 shares                       150,000 200000*9/12
Jul 1 shares                       (37,500) 75000*6/12
Weighted Average shares before Stock Split                   1,362,500
Weighted Average shares after Stock Split                   2,725,000 1362500 shares x 2/1

ekkarill92 answered 1 year ago
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