Question

Whispering Ltd. began its latest fiscal year on January 1, 2020, with 12,000 common shares outstanding....

Whispering Ltd. began its latest fiscal year on January 1, 2020, with 12,000 common shares outstanding. On April 1, Whispering sold 1,200 additional common shares. The company declared and issued a 20% stock dividend on June 1. On July 1, Whispering repurchased and cancelled 210 common shares. An additional 3,750 common shares were issued on September 1. On November 1, Whispering declared and issued a 2-for-one stock split. On December 1, Whispering issued an additional 100 shares. Following the fiscal year, Whispering declared and issued a 3-for-one stock split on February 1, 2021. The company issued its 2020 financial statements on March 10, 2021.

Calculate the weighted average number of common shares that Whispering should use for calculating its EPS numbers for 2020.

Weighted average number of common shares Enter your answer in accordance to the question statement shares
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Answer #1
Date Transaction Period share Number of shares outstanding (a) stock Restated (for stock split and stock dividend )(b) number of months out of 12 months (d) weighted average number of shares (a*b*c*d)
1/1/2020 Beginning 1Jan -1 April 12000 12000 1.20*2 3/12 7200
1/4/2020 Issued additional shares 1April - 1June 1200 12000+1200=13200 1.20*2 2/12 5280
1/6/2020 20% stock dividend 1June - 1July 13200*20%= 2640 13200+2640= 15840 2 1/12 2640
1/7/2020 Repurchased 1July-1Sep -210 15840-210= 15630 2 2/12 5210
1/9/2020 Issue additional shares 1Sep -1Nov 3750 15630+3750= 19380 2 2/12 6460
1/11/2020 stock split 1Nov -1Dec 19380*2= 38760 38760 1/12 3230
1/12/2020 issue additional shares 1Dec -31Dec 100 38760+100=38860 1/12 3238.33
weighted average number of shares outstanding 33258.33 (rounded to 33258 shares)
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