On January 1, 20X1, Anclote Corporation had 600,000 shares of common stock outst

Question

On January 1, 20X1, Anclote Corporation had 600,000 shares of common stock outstanding. On March 1, the corporation issued 90,000 new shares to raise additional capital. On July 1, the corporation declared and issued a 2 for 1 stock split. On October 1, the corporation purchased, in the market, 280,000 of its own outstanding shares and retired them. hares to be used in computing earnings per share for the corporation for the year 20X1. Assume the company's fiscal year is the calendar year. Show all appropriate calculations and, where necessary, round all calculations to the nearest whole share.

Explanation / Answer

Ans)

Common stock outstanding on jan 1 = 600,000

Issued - March 1 (90,000 X 10 / 12) = 75000

July 1 (690,000 X 2 X 6/12) = 690,000

October -1 (280,000 X 3/12) = (70,000)

Weighted Average number of sahres = 1,295,000

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