Question

Weighted Average Shares

At the beginning of the current year, Hardin Company had 20,000 shares of $10 par common stock outstanding. During the year, it engaged in the following transactions related to its common stock, so that at year-end it had 63,800 shares outstanding:

Apr. 1		Issued 5,000 shares of stock.
June 1		Issued 4,000 shares of stock.
July 1		Issued a 10% stock dividend.
Sept. 30		Issued a 2-for-1 stock split, reducing the par value to $5 per share.
Oct. 1		Reacquired 1,000 shares as treasury stock.
Nov. 30		Reissued the 1,000 shares of treasury stock.

Required:

Determine the weighted average number of shares outstanding for computing the current earnings per share. Round your interim computations and final answer for the number of shares to nearest whole number.
Weighted average shares outstanding:  shares

Answer 1

Date	Shares Outstanding
Jan. 1	20,000
Apr. 1	3,750 (5,000*9/12)
June 1	2,333 (4,000*7/12)
July 1	2,608 [(20,000+3,750+2,333)*10%]
Sept. 30	57,382[(20,000+3,750+2,333+2,608)*2]
Oct. 1	(250) (1,000*3/12)
Nov. 30	83 (1,000*1/12)

Stock dividends, Stock splits or Stock subscriptions (retroactively adjusted) - Shares are treated as if they had always been outstanding and included at full amount for current year.

Weighted average shares outstanding = 57,382 - 250 + 83 = 57,215