Question

Sage Inc. uses a calendar year for financial reporting. The company is authorized to issue  8,480,000 shares of $ 10 par common stock. At no time has Sage issued any potentially dilutive securities. Listed below is a summary of Sage’s common stock activities.

1.		Number of common shares issued and outstanding at December 31, 2015		1,900,000
2.		Shares issued as a result of a  10% stock dividend on September 30, 2016		190,000
3.		Shares issued for cash on March 31, 2017		2,130,000
		Number of common shares issued and outstanding at December 31, 2017		4,220,000
4.		A 2-for-1 stock split of Sage’s common stock took place on March 31, 2018

a. Compute the weighted-average number of common shares used in computing earnings per common share for 2016 on the 2017 comparative income statement.

b. Compute the weighted-average number of common shares used in computing earnings per common share for 2017 on the 2017 comparative income statement.

c. Compute the weighted-average number of common shares to be used in computing earnings per common share for 2017 on the 2018 comparative income statement.

d. Compute the weighted-average number of common shares to be used in computing earnings per common share for 2018 on the 2018 comparative income statement.

Answer 1