Question

The following information has been obtained from the Massena Corporation: 100,000 shares of common stock were outstanding on January 1, 2018. 30,000 shares of common stock were issued on March 1, 2018. A 2-for-1 stock split was declared on April 1, 2018. The 2-for-1 stock split was distributed on May 1, 2018. 10,000 shares of common stock were purchased on October 1, 2018. What is the weighted average number of shares to be used in the calculation of basic earnings per share for 2018?

Answer 1

Answer:

247,500

Explanation:

The calculation showing the weighted average number of shares to be used in the calculation of the of the basic earning per share for 2018 is shown below:

= $[(100,000 * \frac{12}{12}) + (30,000 * \frac{10}{12})] * 2 Stock splits - 10,000 * \frac{3}{12}$

$= 250,000 - 2,500\\= 247,500$