Consider the following information for The Pineapple Corporation for year 2019.

Question

Consider the following information for The Pineapple Corporation for year 2019. The company had 1,250,000 shares outstanding on January 1. Then, on April 1, the firm issued 200,000 shares. On July 1, the company management decided to purchase 75,000 Treasury shares. Lastly, on October 1, the firm issued new shares to the existing shareholders as part of its 100% stock dividend The number of shares to be used in computing earnings per ordinary share for 2019 is: Select one: Oa. 2,725,000 O b. 2,825,500 O c. 2,737,500 O d. 1,706,250

Explanation / Answer

Answer C) 2737500

Bonus shares issued = 1250000+200000-75000 = 1375000 shares

Calculation of weightage average of shares = 1250000*12/12 + 200000*9/12 - 75000*6/12 + 1375000

= 1250000+150000-37500+1375000

= 2737500 Shares

Bonus shares will be take for whole year for weightage average calculation of shares

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