Question

On January 1, 2021, Sandhill Corp. had 480,000 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 117.000 shares Issued a 10% stock dividend Acquired 101,000 shares of treasury stock Issued a 3-for-1 stock split Reissued 62,000 shares of treasury stock Determine the weighted-average number of shares outstanding as of December 31, 2021. The weighted average number of shares outstanding Assistance Used e Textbook and Media Assume that Sandhill Corp. earned net income of $3,500,000 during 2021. In addition, it had 96,000 shares of 9X $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, es $2.55) Assistance Used Earnings Per Shares Thook and Media

Answer 1

Answer is given below

Restatement Stock Stock Activity Total Shares Date dividend Split Outstanding shares 480,000 1.1 Feb1 Shares issued 117,000 117,000 1.1 March 1 Stock dividend 59,700 656,700 May 1 Repurchase of shares -101,000 555,700 June 1 Stock split See WN 1 1,667,100 October 1 Reissue of treasury stock 62,000 1,729,100 Total weighted average shares mmmm No. of Total Weighted months Months average shares 132,000 32,175 328,350 138,925 555,700 432,275 1,619,425 Working notes: Stock dividend 10% of (480,000+117,000) Stock split 3 for 1-(480,000+117,000+59,700-101,000) Earning per share-2021 Net Income I weighted average number of shares $3,500,000 1,619,425 $2.16 Earning per share-2021 Net Income-Preference dividend weighted average number of shares | $2,636,000 1,619,425 Preference dividend = 96,000*100*9% Sandhill Corp Income Statement Earning per share Continuing Operation Loss from discontinued operations Earning per share $2.16 $0.28 ($452,000/1,619,425) $1.88