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On January 1, 20X7, Yarrow Corporation had 1,000,000 shares of common stock outstanding. On March 1, the corporation issued 150,000 new shares to raise additional capital. On July 1, the corporation declared and issued a 2-for-1 stock split. On October 1, the corporation purchased on the market 600,000 of its own outstanding shares and retired them.

Compute the weighted average number of shares to be used in computing earnings per share for 2021.

Increase Months
(Decrease) Outstanding Outstanding Share Months

Respuesta :

anthougo

Answer:

Yarrow Corporation

The weighted average number of shares to be used in computing earnings per share for 2021 is:

= 2,125,000 shares.

Explanation:

a) Data and Calculations:

Weighted-Average Number of Shares

Date             Outstanding Shares     Weight       Weighted Average

January 1,                   1,000,000         12/12                 1,000,000

March 1        Issue         150,000         10/12                    125,000  

July 1            2-for-1   2,300,000          6/12                  1,150,000

October 1    Treasury (600,000)          3/12                   (150,000)

Total number           2,850,000                                   2,125,000

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