Amandeep started the year with 500,000 shares of common stock outstanding. On April 1, she issued...

Amandeep started the year with 500,000 shares of common stock outstanding. On April 1, she issued 200,000 shares. On July 15, she had a 2:1 stock split. On November, she purchased back 100,000 shares (treasury stock).

What is the weighted number of share Amandeep has outstanding? _______________

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Expert Solution



	Weightage Number of Shares
	(Accounting Year January XXXX to December XXXX)


Date	Particulars	No. of Shares Issued (A)	No. of Shares Bought back	No. of Shares Outstanding	No. of Months Upto December XXXX (B)	Total No of Shares (A X B)
1-Jan	Balance Beginning of the year	500000	-	500000	12	6000000
1-Apr	Issue of Shares	200000	-	700000	9	1800000
15-Jul	Stock Spilit (2:1)*	1400000	-	2100000	5.5	7700000
1-Nov	Buyback of Shares	-	100000	2000000	2	-200000
						15300000

*Number of Shares Outstanding before the event of Stock Spilit, should be consider for Newly shares issued against of Stock spilit.i.e.2:1


	The weighted average number of shares
	= Total Number of Shares
	12

	15300000
	12

=	1275000	Shares


Alternatively,
	The weighted average number of shares
	= (500000X3/12)+ (700000X3.5/12)+(2100000x3.5/12) + (2000000 x 2/12)

	= 1275000 Shares

ekkarill92 answered 1 year ago

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