Question

Cricket Inc. had 400,000 shares of common stock outstanding on January 1, 2011 and issued 100,000 additional shares on July 1, 2011. There were $600,000 of preferred stock dividends declared and paid during the year. If net income for the year ended December 31, 2011 was $2,724,000, the earnings per share were:

Answer 1

Date	Number of shares	Weight	Weighted Average
01-01-2011	400,000	12/12	400,000
01-07-2011	100,000	6/12	50,000
Total	500,000		450,000

Earnings per share

$ 4.72

{ (2,724,000 - 600,000 ) / 450,000 }