Question

Exercise 16-15 (Part Level Submission) Flounder Inc. uses a calendar year for financial reporting. The company is authorized to issue 9,720,000 shares of $10 par common stock. At no time has Flounder issued any potentially dilutive securities. Listed below is a summary of Flounder's common stock activities. Number of common shares issued and outstanding at December 31, 2015 Shares issued as a result of a 10% stock dividend on September 30, 2016 Shares issued for cash on March 31, 2017 Number of common shares issued and outstanding at December 31, 2017 A 2-for-1 stock split of Flounder's common stock took place on March 31, 2018 1,910,000 191,000 1,830,000 3,931,000 1. 3. 4. Compute the weighted-average number of common shares used in computing earnings per common share for 2016 on the 2017 comparative income statement. shares Click if you would like to Show Work for this question: Open Show Work

Answer 1

Weighted average shares is 2,101,000

Calculation :-

January 1 to September 30 (1,910,000 x 9/12) = 1,432,500

Add: adjustment for 10% stock dividend = 143,250

(1,432,500 x 10%)

October 1 to December 31

(1,910,000 + 191,000) x 3/12 = 525,250

weighted average share for 2016 = 2,101,000 shares