Question

xercise 16-16 On January 1, 2018, Culver Corp. had 474,000 shares of common stock outstanding. During 2018, it had the following transactions that affected the Common Stock account. February 1 Issued 126,000 shares March 1 Issued a 10% stock dividend May 1 Acquired 100,000 shares of treasury stock June 1 Issued a 3-for-1 stock split October 1 Reissued 62,000 shares of treasury stock Determine the weighted-average number of shares outstanding as of December 31, 2018. The weighted-average number of shares outstanding LINK TO TEXT Assume that Culver Corp. earned net income of $3,346,000 during 2018. In addition, it had 103,000 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). (Round answer to 2 decimal places, e.g. $2.55.) Earnings Per Share $

Answer 1

(a)

Event	Dates Outstanding	Shares Outstanding	Restatement	Fraction of Year	Weighted Shares
Beginning balance	Jan. 1–Feb. 1	474,000	1.1 X 3.0	1/12	130,350
Issued shares	Feb. 1–Mar. 1	600,000	1.1 X 3.0	1/12	165,000
Stock dividend	Mar. 1–May 1	660,000	3.0	2/12	330,000
Reacquired shares	May 1–June 1	560,000	3.0	1/12	140,000
Stock split	June 1–Oct. 1	1,680,000		4/12	560,000
Reissued shares	Oct. 1–Dec. 31	1,742,000		3/12	435,500
Weighted-average number of shares outstanding					1,760,850

(b)	Earnings Per Share =	$3,346,000 (Net Income)	= $1.90
		1,760,850 (Weighted-average Number Shares Outstanding)