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: O a. 2,725,000 O b. 2,825,500 O c. 2,737,500 0 d. 1706250

Explanation / Answer

No. of Shares "X"By Period "=" Net Shares outstanding Shares Outstanding as on January 01=               12,50,000 "X"By 12 month/12 "="               12,50,000 Shares Add: April 01 = Issued new shares                  2,00,000 "X"By 9 month/12 "="                  1,50,000 Shares Less: Repurchase stock as treasurry stock                     75,000 "X"By 6 month/12 "="                     37,500 Shares Net outstanding shares               13,75,000 "X"By               13,62,500 Shares Oct- 01, New Shares as 100% stock Dividend=               13,75,000 "X"By 3 month/12 "="                  3,43,750 Shares               27,50,000               17,06,250 Answer = The number of shares to be used in computing earning per shares = $ 1,706,250 = Option D

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