Problem 16-9 Save for later Submit Answer CONTINUE Problem 16-9 Flint Corporatio
ID: 2585837 • Letter: P
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Problem 16-9
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Problem 16-9
Flint Corporation is preparing the comparative financial statements to be included in the annual report to stockholders. Flint employs a fiscal year ending May 31.Income from operations before income taxes for Flint was $1,445,000 and $635,000, respectively, for fiscal years ended May 31, 2018 and 2017. Flint experienced a loss from discontinued operations of $367,000 on March 3, 2018. A 40% combined income tax rate pertains to any and all of Flint Corporation’s profits, gains, and losses.
Flint’s capital structure consists of preferred stock and common stock. The company has not issued any convertible securities or warrants and there are no outstanding stock options.
Flint issued 37,100 shares of $100 par value, 6% cumulative preferred stock in 2014. All of this stock is outstanding, and no preferred dividends are in arrears.
There were 1,003,200 shares of $1 par common stock outstanding on June 1, 2016. On September 1, 2016, Flint sold an additional 422,400 shares of the common stock at $18 per share. Flint distributed a 20% stock dividend on the common shares outstanding on December 1, 2017. These were the only common stock transactions during the past 2 fiscal years. Determine the weighted-average number of common shares that would be used in computing earnings per share on the current comparative income statement for:
Weighted-average number of common shares (1) The year ended May 31, 2017.
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(2) The year ended May 31, 2018.?
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Particulars Weighted-average number of common shares 1 The year ended May 31, 2017. 1,320,000 2 The year ended May 31, 2018. 1,425,600 Explanation No. of Shares No.of Shares of $ 1 par common stock outstanding as on June 1 , 2016 1,003,200 No.of Shares of $ 1 par common stock Sold on September 1 , 2016 at $18 per Share 422,400 No.of Shares of $ 1 par common stock outstanding as on May 31 , 2017 1,425,600 Weighted-average number of common shares year ended May 31,2017 = ((1003200 X12)+ (422400 X 9))/12 = 1,320,000 Weighted-average number of common shares year ended May 31,2018 1,425,600 No common stock transactions in 2018