Question

Ivanhoe Corporation began its latest fiscal year on January 1, 2021, with 500,000 common shares outstanding. During the year, the following events occurred: • On February 1, Ivanhoe sold 13,800 additional common shares. • The company declared and issued a 25% stock dividend on March 1. • On June 1, Ivanhoe repurchased and cancelled 3,450 common shares. An additional 4,600 common shares were issued on July 1. • On September 1, Ivanhoe declared and issued a three-for-one stock split. • On December 1, Ivanhoe issued an additional 14,400 shares. • Following the fiscal year, Ivanhoe declared and issued a two-for-one stock split on February 1, 2022. The company issued its 2021 financial statements on April 30, 2022. Calculate the weighted average number of common shares that Ivanhoe should use for calculating its EPS numbers for 2021. Weighted average number of common shares

Question#2:

Answer 1

1.

Solution: Computation of weighted average outastanding shares Date 1-Jan Shares outstanding 1-Feb Issued shares 1-Jun Repurchased Shares 1-Jul Issued shares 1-Dec Issued shares Number of Stock Dividend Stock Split shares Restatement Restatement 5000001 1.251 138001 1.2513 -34501 4600 14400 Total weighted average number of shares outstanding را در | No. of Total Weighted- months | Months | average shares 121 12 1875000 11 12 47437.5|| 12 -6038| 6 12 69001 11 12 12001 1924500 3

2.

- Income statement Income from continuing operations before tax Income tax expense Income from continuing operations after tax Income from discontinued operations :Gain on disposal of business segment, net of taxes (280,000 - 280,000 x 30% Net income Basic earnings per share: Income from continuing operations after tax (Income from continuing operations after tax/Number of common shares = 812,000/50,000 Income from discontinued operations (Income from discontinued operations after tax Number of common shares = 196,000/50,000) Basic earnings per share 1,160,000 348,000 812,000 196,000 1,008,000 $16.24| $3.92|| $20.16