On January 1, 2018, Coronado Corp. had 491,000 shares of common stock outstanding. During 2018, it had the following transactions that affected the Common Stock account.
February 1 Issued 114,000 shares
March 1 Issued a 10% stock dividend
May 1 Acquired 103,000 shares of treasury stock
June 1 Issued a 3-for-1 stock split
October 1 Reissued 60,000 shares of treasury stock
Assume that Coronado Corp. earned net income of $3,619,000 during 2018. In addition, it had 98,000 shares of 9%, $100 par nonconvertible, noncumulative preferred stock outstanding for the entire year. Because of liquidity considerations, however, the company did not declare and pay a preferred dividend in 2018. Compute earnings per share for 2018, using the weighted-average number of shares determined in part (a).
Answer = 2.04
| Event | date outstanding | share outstanding | stock dividend restatement | stock split restatement | number of months | ÷ by 12 months | weighted shares |
| Begining balance | 1 jan to 1 feb | 491000 | 1.1 | 3.0 | 1 | 12 | 135025 |
| Issued shares | 1feb to 1march | 605000 | 1.1 | 3.0 | 1 | 12 | 166375 |
| Stock dividend | 1 march to 1 may | 665500 | 3.0 | 2 | 12 | 332750 | |
| Reacquired shares | 1 may to june 1 | 562500 | 3.0 | 1 | 12 | 140625 | |
| Stock split | june 1 to october 1 | 1687500 | 4 | 12 | 562500 | ||
| Reissued shares | october 1 to 31 december | 1747500 | 3 | 12 | 436875 | ||
| 1774150 |
Earning per share = (net income - preferred dividend) ÷ weighted average shares
= $3619000/1774150
= 2.04
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