On January 1, 2018, Shamrock Corp. had 478,000 shares of common stock outstandin
ID: 2604743 • Letter: O
Question
On January 1, 2018, Shamrock Corp. had 478,000 shares of common stock outstanding. During 2018, it had the following transactions that affected the Common Stock account. February 1 Issued 120,000 shares March 1 Issued a 10% stock dividend May 1 Acquired 102,000 shares of treasury stock June 1 Issued a 3-for-1 stock split October 1 Reissued 59,000 shares of treasury stock Determine the weighted-average number of shares outstanding as of December 31, 2018. The weighted-average number of shares outstanding LINK TO TEXT Assume that Shamrock Corp. earned net income of $3,582,000 during 2018. In addition, it had 100,000 shares of 9%, $100 par nonconvertible, noncumulative preferred stock outstanding for the entire year. Because of liquidity considerations, however, the company did not declare and pay a preferred dividend in 2018.
Compute earnings per share for 2018, using the weighted-average number of shares determined in part (a). (Round answer to 2 decimal places, e.g. $2.55.) Earnings Per Share $
Assume the same facts as in part (b), except that the preferred stock was cumulative. Compute earnings per share for 2018. (Round answer to 2 decimal places, e.g. $2.55.) Earnings Per Share
Explanation / Answer
1) Weighted Average Outstanding shares as on Dec 31, 2018 :
2) EPS (for non-cumulative interest not been paid, not made payable as non-cumulative) =( Net Income $3582000 - preferred dividend $0 )/ Shares outstanding 1724250 shares = $2.08 per share
3) EPS (for cumulative interest not been paid, but made payable) =
=( Net Income $3582000 - preferred dividend $10,000,000 * 9% )/ Shares outstanding 1724250 shares
= (3582000 - $900,000) / 1724250 = $1.56 per share
Date Before split shares issued outstanding period After split - shares Outstanding as on Dec 31, 2018 Jan1 478000 12 months 1434000 1434000*12/12= 1434000 Feb 1 120000 11 months 360000 360000*11/12= 330000 Mar 1 59800 10 months 179400 179400*10/12= 149500 May 1 -102000 8 months -306000 -306000*8/12= - 204000 Oct 1 - 3 months 59000 59000*3/12 = 14750 Total Outstanding shares as on Dec 31 2018 = 1724250