Question

Exercise 16-16 On January 1, 2021, Flounder Corp. had 501,000 shares of common stock outstanding. During 2021, it had the following transactions that affected the Common Stock account. February 1 March 1 May 1 June 1 October 1 Issued 126,000 shares Issued a 10% stock dividend Acquired 101,000 shares of treasury stock Issued a 3-for-1 stock split Reissued 57,000 shares of treasury stock Determine the weighted average number of shares outstanding as of December 31, 2021. The weighted average number of shares outstanding LINK TO TEXT Assume that Flounder Corp. earned net income of $3,308,000 during 2021. In addition, it had 99,000 shares of 8%, $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). (Round answer to 2 decimal places, e.g. $2.55.) Earnings Per Share &

Answer 1

A. Calculation of weighted average no of shares

Event	Date outstanding	Shares outstanding	Stock dividend restatement	Stock split restatement	Number of months	÷12 months	Weighted shares
Beginning balance	Jan 1- Feb1	501,000	1.1	3.0	1	12	137,775
Issued shares	Feb 1- Mar1	527,000	1.1	3.0	1	12	144,925
Stock dividend	Mar1-May1	579,700		3.0	2	12	289,850
Reacquired shares	May1-June1	478,700		3.0	1	12	119,675
Stock split	June1- Oct1	1,436,100			4	12	478,700
Reissued shares	Oct 1- Dec 31	1,493,100			3	12	373,275
Weighted average no of shares							1,544,200

​​​​Weighted average no of shares = 1,544,200

B. Earnings per share = Net income- Preferred dividend /Weighted average no of shares = $3,308,000/1,544,200

= 2.14

C. Earnings per share = Net income- preferred divided/ Weighted average no of shares

= $3,308,000-$792,000/1,544,200

=$2,516,000/1,544,200

=1.62

Preferred dividend= 99,000 shares ×$100 ×8%

D. Income statement

Net income	$3,308,000
Add: Loss from discontinued operations	$427,000
Income from Continued operations	$3,735,000

​​​​​​Eps =

Income from continuing operations =$3,735,000/1,544,200 = 2.41

Loss from discontinued operations =$427,000/1,544,200 =(0.27)

Net income (EPS) = 2.14

_____×_____

All the best

Please do support

Any doubt comment below