Additional Problem 14 On January 1, 2017, Carla Vista Corporation had 83,400 com

Question

Additional Problem 14 On January 1, 2017, Carla Vista Corporation had 83,400 common shares outstanding. On April 1, the company issued an additional 37,800 shares. On July 1, the company repurchased and cancelled 41,400 common shares. On November 1, the company issued 63,000 new shares. Cash dividends of $55,400 were paid to preferred shareholders. Net income for the year was $978,800. Calculate the weighted average number of shares for 2017 and earnings per share (EPS). (Round earnings per share (EPS) to 2 decimal places, e.g. 15.75.) Weighted average number of shares Earning per share $ /share

Explanation / Answer

Weighted average number of shares = (83,400*12/12) + (37,800*9/12) - (41,400*6/12) + (63,000*2/12)

= 83,400 + 28,350 - 20,700 + 10,500

= 101,550

Earnings per share = (net income - preferred dividends) / weighted average number of common shares outstanding.

= ($978,800 - $55,400) / 101,550

= $9.09 per share

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