Question

General Corporation was organized on January 1 and issued 650,000 shares of common stock on that...

General Corporation was organized on January 1 and issued 650,000 shares of common stock on that date. On July 1, an additional 300,000 shares were issued for cash. Net income for the year was $4,570,000. Net earnings per share amounted to:

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Answer #1

Calculation of Weighted average number of shares outstanding

Details

Working

Number of shares

Beginning shares

(650000/12 x 12)

650000

Issued on July 1

(300000/12 x 6)

150000

Total weighted average number of shares

800000

Earnings per share

A

Net income

$ 4,570,000.00

B

Total weighted average number of shares

800000

C=A/B

Earnings per share

$                   5.71

Net earnings per share amounts to $ 5.71          

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