Question

Stellar Inc. uses a calendar year for financial reporting. The company is authorized to issue 8,490,000 shares of $10 par common stock. At no time has Stellar issued any potentially dilutive securities. Listed below is a summary of Stellar’s common stock activities. 1. Number of common shares issued and outstanding at December 31, 2018 2,170,000 2. Shares issued as a result of a 10% stock dividend on September 30, 2019 217,000 3. Shares issued for cash on March 31, 2020 1,850,000 Number of common shares issued and outstanding at December 31, 2020 4,237,000 4. A 2-for-1 stock split of Stellar’s common stock took place on March 31, 2021

Compute the weighted-average number of common shares used in computing earnings per common share for 2019 on the 2020 comparative income statement. shares

Compute the weighted-average number of common shares used in computing earnings per common share for 2020 on the 2020 comparative income statement. shares

Compute the weighted-average number of common shares to be used in computing earnings per common share for 2020 on the 2021 comparative income statement. shares

Compute the weighted-average number of common shares to be used in computing earnings per common share for 2021 on the 2021 comparative income statement. shares

Answer 1

Answer Given that Page No 0 Authorized to Prue shares = 8490,000 - Par value = $10 . No.of shares issued = 2,140,000 shares inued as 10'). Fotock dividend - 014000 Shares ensued for cash = 1,850,000 No. of shares outstanding = 41234,000 boeighted avelacned common shares woun wuwu weighted average no.of common shanes = {2140,000 x ; x 1107.) + Karoco + arco)" = {2140.000 x3 x 14h4598599 by r Jant to Sep 3 3 months 1790250 + 596,750 = 2384000 p. weighted average noief common shares e 2387000

1 goeighted average no. of common shares Pageino@ weighted average no of common shares = {214000 + 2190) + (4234000 x 22) Tan I to man 31,200 = 596750+ 3177950 . 3 months Apri to dec 31 9 months = 3714500 VW p.weighted average no. of common shares = 3744,500 sveighted average o f common shares weighted average no.of comenon shares = 3774500 XQ = 7549000 I.. weighted average no.of common shares - 1,549,000 Ⓡeceighted average noios common shares kreighted average no.of common shares = ((493160x2 x 2) + (4234000 X 8 X ) : : 2118500 + 6355500 al weighted werage 300

- Page No 3 Jan 1 to Map 3),2021-3 months Mar 31 to dec 31, 2021 e 9 ronths :8444 000 C .. weighted average no.of common shares = 8,444.000