Question

January 1, 2021, Flint Corp. had 502,000 shares of common stock outstanding. During 2021, it had the following transactions that affected the Common Stock account. February 1 Issued 125,000 shares March 1 Issued a 10% stock dividend May 1 Acquired 98,000 shares of treasury stock June 1 Issued a 3-for-1 stock split October 1 Reissued 58,000 shares of treasury stock Assume that Flint Corp. earned net income of $3,605,000 during 2021. In addition, it had 104,000 shares of 9%, $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 2021. Compute earnings per share for 2021, using the weighted-average number of shares determined in part (a). part a) weighted average number of shares 1,853,225

Answer 1

Answer with working notes is given below

Restatement Stock Stock Activity Total Shares Date dividend Split Outstanding shares 502,000 1.1 Feb1 Shares issued 125,000 125,000 1.1 March 1 Stock dividend 62,700 689,700 May 1 Repurchase of shares -98,000 591,700 June 1 Stock split See WN 1,775,100 October 1 Reissue of treasury stock 58,000 1,833,100 Total weighted average shares mmmm No. of Total Weighted months Months average shares 138,050 34,375 344,850 147,925 591,700 458,275 1,715,175 Working notes: Stock dividend 10% of (502,000+125,000) Stock split 3 for 1-(502,000+125,000+62,700- 98,000) Earning per share Net Income weighted average number of shares $3,605,000 1,715,175 $2.10