Problem 3: Weighted Average Outstanding Shares At the beginning of 2012, Cooper

Question

Problem 3: Weighted Average Outstanding Shares
At the beginning of 2012, Cooper Corporation had 280,000 shares of $10 par common stock outstanding. During the year, it engaged in the following transactions related to its common stock:

March 1 Issued 45,000 shares of stock at $22 per share.
June 1 Issued a 15% stock dividend.
July 1 Issued 10,000 shares of stock at $27 per share.
Aug 31 Issued a two-for-one stock split on outstanding shares, reducing the par value to $5 per share.
Oct 31 Reacquired 95,000 shares as treasury stock at a cost of $30 per share.
Nov 30 Reissued 45,000 treasury shares at a price of $33 per share.

Required:
Determine the following:
1. weighted average number of shares outstanding for computing the current earnings per share.
2. number of common shares outstanding at December 31, 2012.

Explanation / Answer

January and February had 280,000 shares March, April, and May 280,000 + 45,000 = 325,000 shares June 325,000*1.15 = 373,750 shares July and August 373,750+ 10,000 = 383,750 shares September and October 383750*2 = 767,500 shares November 767500-95000 = 672,500 shares December 672,500 + 45000 = 717,500 shares 280,000*2/12 + 325,000*3/12 + 373,750/12 + 383750*2/12 + 767,500*2/12 + 672500/12 + 717500/12 = 466,770.83 shares 1. weighted average number of shares outstanding for computing the current earnings per share. Answer: 466,770.83 shares 2. number of common shares outstanding at December 31, 2012. Answer: 717,500 shares

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