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1. On December 31, 2020, Berclair, Inc. had 200 million shares of common stock and 3...

1. On December 31, 2020, Berclair, Inc. had 200 million shares of common stock and 3 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2021, Company purchased 24 million shares of its common stock as treasury stock. Company issued a 5% common stock dividend on July 1, 2021. Four million treasury shares were sold on October 1. Net income for the year ended December 31, 2021, was $150 million.

Compute earnings per share for the year ended December 31, 2021.

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Answer #1

Calculate weighted average share

Date Weighted average share
Jan 1 200*1.05*2/12 35
Mar 1 (200-24)*1.05*4/12 61.6
July 1 184.80*3/12 46.2
Oct 1 188.80*3/12 47.2
Total 190

Earning per share = (150-27)/190 = 0.65 per share

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