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At the beginning of the current year, Hardin Company had 20,000 shares of $10 par common stock outstanding. During the year, it engaged in the following transactions related to its common stock, so that at year-end it had 63,800 shares outstanding: Apr. 1Issued 5,000 shares of stock. June 1Issued 4,000 shares of stock. July 1Issued a 10% stock dividend. Sept. 30Issued a 2-for-1 stock split, reducing the par value to $5 per share. Oct. 1Reacquired 1,000 shares as treasury stock. Nov. 30Reissued the 1,000 shares of treasury stock. Required: Determine the weighted average number of shares outstanding for computing the current earnings per share. Round your interim computations and final answer for the number of shares to nearest whole number.

Sagot :

Anthougoidn

Answer:

Hardin Company

The weighted average number of shares outstanding for computing the current earnings per share is:

= 35,841.

Explanation:

a) Data and Calculations:

Date          Transaction            Number         Weight       Result

January 1   Outstanding           20,000            12/12        20,000

April 1         Issue of shares        5,000             9/12           3,750

June 1        Issue of shares        4,000             7/12           2,333

July 1         Stock Dividend         2,900             6/12           1,450

Sept. 30    Stock split               31,900              3/12          7,975

Oct. 1        Treasury Stock         (1,000)             3/12             250

Nov. 30    Treasury Stock          1,000               1/12               83

Dec. 31      Outstanding weighted average shares        35,841

b) The Stock dividend was issued to 29,000 shares.  The 10% gives 2,900 shares.  For the stock split of 2 for 1, the number of shares will double, meaning that each shareholder will now have 2 shares.

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