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Benn, Incorporated, has 6,000,000 shares of common stock outstanding on December 31, 2017. An additional 1,000,000...

Benn, Incorporated, has 6,000,000 shares of common stock outstanding on December 31, 2017. An additional 1,000,000 shares of common stock were issued on April 1, 2018, and 500,000 more on July 1, 2018. On October 1, 2018, Benn declared a 10% stock dividend. On November 1, Benn purchased 120,000 of its own stock. What was the number of shares to be used in computing basic earnings per share?

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Answer #1

Weighted Average Shares outstanding will be used for calculating the Basic EPS.The weighted average is calculated taking into account the periodwise outstanding numbers.

The calculation table for the gicen case will be as hereunder :

Therefore number to be used is 7167500

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