nt CALCULATOR FULL SCREEN PRINTER VERSON eaACK Exercise 16-15 Buffalo Inc. uses

Question

nt CALCULATOR FULL SCREEN PRINTER VERSON eaACK Exercise 16-15 Buffalo Inc. uses a calendar year for financial reporting. The company is authorized to issue 8,100,000 shares of $10 par common stock. At na potentially dilutive securities. Listed below is a summary of Buffalo's common stock activities. 1. 2. 3. time has Buffalo issued any Number of common shares issued and outstanding at December 31, 2015 Shares issued as a result of a 10% stock dividend on September 30, 2016 Shares issued for cash on March 31, 2017 Number of common shares issued and outstanding at December 31, 2017 A 2-for-1 stock split of Buffalo's common stock took place on March 31, 2018 2,030,000 203,000 2,200,000 4,433,000 4. Compute the weighted-average number of common shares used in computing earnings per common share for 2016 on the 2017 comparative income statement. shares Compute the weighted-average number of common shares used in computing earnings per common share for 2017 on the 2017 comparative income statement. shares LENK TO cy Policy 1 2000-2018 John Wiley &Sons. Inc. All Rights Reserved. A Division of Version 4.24.9.3

Explanation / Answer

Buffalo Inc

Jan 1, 2016 to Sept 30, 2016

(2,030,000 x 9/12)

1,522,500

Retroactive adjustment for stock dividend

1,522,500 x 1.10

1,674,750

After adjustment, Jan 1, 2016 to Sept 30, 2016

1,674,750

Oct 1, 2016 to Dec 31, 2016

(2,030,000 + 203,000) x 3/12

5,582,250

weighted average number of shares

2,233,000

Jan 1, 2017 to March 31, 2017

(2,233,000 x 3/12)

558,250

Apr 1, 2017 to Dec 31, 2017

(4,433,000 x 9/12)

3,324,750

Weighted average number of common shares

3,883,000

2017 weighted average number of common shares

(computed in b. above)

3,883,000

retroactive adjustment for stock split

3,883,000 x 2

7,766,000

Jan 1, 2018 to Mar 31, 2018

(4,433,000 x 3/12)

1,108,250

Retroactive adjustment for stock split

1,108,250 x 2

2,216,500

After adjustment, Jan 1, 2018 to Mar 31, 2018

(4,433,000 x2) x 3/12

6,649,500

weighted average number of shares

8,866,000

Jan 1, 2016 to Sept 30, 2016

(2,030,000 x 9/12)

1,522,500

Retroactive adjustment for stock dividend

1,522,500 x 1.10

1,674,750

After adjustment, Jan 1, 2016 to Sept 30, 2016

1,674,750

Oct 1, 2016 to Dec 31, 2016

(2,030,000 + 203,000) x 3/12

5,582,250

weighted average number of shares

2,233,000

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