Question

Exercise 16-16 On January 1, 2018, Cullumber Corp. had 502,000 shares of common stock outstanding. During 2018, it had the following transactions that affected the Common Stock account. February 1 March 1 May 1 June 1 October 1 Issued 125,000 shares Issued a 10% stock dividend Acquired 98,000 shares of treasury stock Issued a 3-for-1 stock split Reissued 58,000 shares of treasury stock *Your answer is incorrect. Try again. Determine the weighted average number of shares outstanding as of December 31, 2018. The weighted average number of shares outstanding T 1824225 LINK TO TEXT x Your answer is incorrect. Try again. Assume that Cullumber Corp. earned net income of $3,605,000 during 2018. In addition, it had 104,000 shares of 9%, $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 2018. Compute earnings per share for 2018, using the weighted average number of shares determined in part (a). (Round answer to 2 decimal places, e.g. $2.55.) Earnings Per Share 1.98 LINK TO TEXT

Answer 1

calculation foe A A*B*C*D/E Event shares outstanding stock split number stock dividend shares outstanding reinstate of reinstatement ment months /12 weighted shares 1. 13 1.1 30 Beginning 502000 502000 01-Feb 502000+125000= 627000 01-Mar 627000(1+1)= 689700 01-May 689700-98000= 591700 01-Jun 591700*3= 1775100 01-Oct 1775100+58000= 1833100 Weighted average number of shares outstanding 11 21 11 - 3 12 12 12 12 12 12 138,050 172,425 344,850 147,925 591,700 458,275 1,853,225

Required b) EPS :(Net income-preferred dividend)/weighted average shares = [3605000-0)/1853225 1.95 per share Required C) preferred dividend :104000*100*9% = 936,000 EPS :(Net income -preferred dividend)/weighted average shares =(3605000-936000)/1853225 1.44 per share

Required d) d)Income from continuing operations : 1366 $ 4,054,000 Income from continuing opera 4054000/18$ loss from discontinued operations : -44900 net income =[3605000-0)/1853225 2.19 per share (0.24) per share 1.95 per share