Question

PROBLEMS I (60 puntos) 1- (Valor 15 puntos) Simple Capital Structure) On January 1, 2015, Carmen Corp. had 680,000 shares of common stock outstanding. During 2015, it had the following transactions that affected the common stock account. February 1 Issued 180,000 shares March 1 Issued a 15% stock dividend May 1 Acquired 150,000 shares of treasury stock June 1 Issued a 5-for-1 stock split October 1 Reissued 65,000 shares of treasury stock Additional information: Net income $4,500,000 Preferred stock: 58,000 shares outstanding, $100 par, 9%

Answer 1

1) Weighted average share outstanding

	Share		Weighted average share outstanding
Jan 1	680000	680000*1.15*5*1/12	325833
Feb 1	860000	860000*1.15*5*1/12	412083
Mar 1	989000	989000*5*2/12	824167
May 1	839000	839000*5*1/12	349583
June 1	4195000	4195000*4/12	1398333
Oct 1	4260000	4260000*3/12	1065000
Total			4374999

Earning per share = (4500000-522000)/4374999 = 0.91 per share