Question

Flounder Corporation began its latest fiscal year on January 1, 2021, with 550,000 common shares outstanding....

Flounder Corporation began its latest fiscal year on January 1, 2021, with 550,000 common shares outstanding. During the year, the following events occurred:

● On February 1, Flounder sold 14,200 additional common shares.
● The company declared and issued a 25% stock dividend on March 1.
● On June 1, Flounder repurchased and cancelled 3,550 common shares.
● An additional 5,100 common shares were issued on July 1.
● On September 1, Flounder declared and issued a three-for-one stock split.
● On December 1, Flounder issued an additional 14,700 shares.
● Following the fiscal year, Flounder declared and issued a two-for-one stock split on February 1, 2022.


The company issued its 2021 financial statements on April 30, 2022. Calculate the weighted average number of common shares that Floundershould use for calculating its EPS numbers for 2021.

Weighted average number of common shares ?

Could you please write down the solution step by step? Thank you in advance!

Business   Accounting   
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Answer #1

Solution:

Computation of weighted average outastanding shares
Date Number of shares Stock Dividend Restatement Stock Split Restatement No. of months Total Months Weighted-average shares
01-Jan Shares outstanding 550000 1.25 3 12 12 2062500
01-Feb Issued shares 14200 1.25 3 11 12 48812.5
01-Jun Repurchased Shares -3550 3 7 12 -6213
01-Jul Issued shares 5100 3 6 12 7650
01-Dec Issued shares 14700 1 12 1225
Total weighted average number of shares outstanding 2113975
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