Question

A stock split at Marco Company occurred during the year. What should be calculated at the years EPS, the additional shares issued in the split are treated as having been issued.

A. On the date of distribution/transaction

B. At the end of the year

C. At the beginning of the year

D. On the first day of the upcoming fiscal year?

Answer 1

Answer

--Correct Answer = Option 'C' The additional shares issued in the Share Split are treated to be issued and outstanding since "at the beginning of the year".

--Example, if company has 5000 shares outstanding on Jan1. It issued 2000 more shares on 1 Mar. It then announces a 2 for 1 split. New additional shares would be = 6000 shares x 2/1 = 12000 shares would assumed to be outstanding since 1 Jan.