On January 1, 2018, Monty Corp. had 479,000 shares of common stock outstanding.
ID: 2603107 • Letter: O
Question
On January 1, 2018, Monty Corp. had 479,000 shares of common stock outstanding. During 2018, it had the following transactions that affected the Common Stock account.
February 1 Issued 117,000 shares
March 1 Issued a 10% stock dividend
May 1 Acquired 103,000 shares of treasury stock
June 1 Issued a 3-for-1 stock split
October 1 Reissued 59,000 shares of treasury stock
A. Determine the weighted-average number of shares outstanding as of December 31, 2018.
B. Assume that Monty Corp. earned net income of $3,408,000 during 2018. In addition, it had 102,000 shares of 10%, $100 par nonconvertible, noncumulative preferred stock outstanding for the entire year. Because of liquidity considerations, however, the company did not declare and pay a preferred dividend in 2018. Compute earnings per share for 2018, using the weighted-average number of shares determined in part (a). (Round answer to 2 decimal places, e.g. $2.55.)
C. Assume the same facts as in part (b), except that net income included a loss from discontinued operations of $426,000 (net of tax). Compute earnings per share for 2018. (Round answer to 2 decimal places, e.g. $2.55.)
Monty Corp.
Income Statement
Explanation / Answer
On January 1, 2018, Monty Corp. had 479,000 shares of common stock outstanding.
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