Question

Weighted Average Shares

At the beginning of 2014, Hardin Company had 230,000 shares of $10 par common stock outstanding. During the year, it engaged in the following transactions related to its common stock:

March	1	Issued 43,000 shares of stock at $22 per share.
June	1	Issued a 15% stock dividend.
July	1	Issued 9,000 shares of stock at $27 per share.
Aug.	31	Issued a 2-for-1 stock split on outstanding shares, reducing the par value to $5 per share.
Oct.	31	Reacquired 98,000 shares as treasury stock at a cost of $30 per share.
Nov.	30	Reissued 48,000 treasury shares at a price of $33 per share.

Required:

1. Determine the weighted average number of shares outstanding for computing the current earnings per share. Round your interim computations and final answer for the number of shares to nearest whole number.
  
2. Determine the number of common shares outstanding at December 31, 2014.

Answer 1

Answer-

Dates	Outstanding	Effect of stock dividend	Effect of split	Assumed Share Outstanding	Fraction of period	Weighted Average Shares
1/1- 28/2	230000	1.15	2	529,000 (230,000*1.15*2)	2 / 12	88167
Issuance on 1/3	43,000
1/3 – 31/5	273,000	1.15	2	627,900 (273,000*1.15*2)	3 / 12	156975
15% stock dividend, 1/6	40,950 (15%*$273,000)
1/6- 30/6	313,950		2	627,900	1 / 12	52,325
Issuance on 1/7	9,000
1/7 – 31/8	322,950		2	645,900	2 / 12	107,650
2-for-1 stock split, 31/8	322,950
31/8 – 31/10	645,900			645,900	2 / 12	107,650
Reacquisition on 31/10	-98,000
31/10 – 30/11	547,900			547,900	1 / 12	45,658
Reissue on 30/11	48,000
30/11 -31/12	595,900 [Number of Shares outstanding as on 31/12/2014]			595,900	1 / 12	49,658
Weighted average number of common shares outstanding						608,083

1) Weighted average number of shares outstanding for computing the current earnings per share = 608,083.

2) Number of common shares outstanding at December 31, 2014 = 595,900