Question

so Decrease No Effect Meyers, Inc. presented the following data: $2,500 2014 Net income Preferred stock: 10% cumulative, not convertible $3.000 Common stock: 1/1: 1,000 shares outstanding nem 9/1: 1,000 shares issued in a 2-for-1 stock split 10/1: 200 shares treasury stock acquired 11/1: 240 shares issued for cash No preferred dividends were declared or paid in 2014, the first year of the company. The denominator to be used in Basic EPS is: a. 1.910 1,657 2,090 1,990 menn L. Hon numharaf eharee All

Answer 1

Answer:

Correct answer is:

d. 1990

Explanation:

The denominator in basic EPS calculation is weighted average number of shares outstanding.

The calculation is as follows:

Months shares are Fraction of Year Shares outstanding (SO) outstanding outstanding (w) 2000 Jan to Sep 9/12 1800 Oct 1/12 2040 Nov to Dec 2/12 Weighted average shares oustanding = Equivalent units (so * W) 1,500 150 340 1,990

Denominator = weighted average number of shares outstanding = 1,990

Option d is correct and other options a, b and c are incorrect.