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Weighted Average Common Shares and EPS

Toys Corporation reported that the following changes in common shares outstanding occured during the year 2019.

January 1 60,000 common shares were outstanding on January 1st, 2019 April 1st issued 50,000 commom shares.

required:
a. Calculate the weighted-average number of common shares outstanding during the year 2019.

b. Toys earnings for the year 2019 amounted to $985,000. (Hint: remember you have already calculayed the # of shares above). Calculate the EPS.



Weighted Average Common Shares and EPS Toys Corporation reported that the following changes in common shares outstanding occu
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Answer #1

1) 97500 shares

shares outstandind period covered weighted shares
for the first 3 months 60000 3/12 15000
for the balance 9 months 110000 9/12 82500
weighted average 97500

on january 1, 2019 the company has an outstandind common shares of 60000 shares.this 60000 shares outstanding is only for 3 months period after that at april 1, 2019 the company issues new common shares of 50000 shares .from april 1, 2019 the outstanding shares is 110000 (60000+50000) shares for remainin 9 months in 2019

weighted shares=shares outstanding*period covered

for first 3 months=60000*(3/12)=15000

or the balance 9 months=110000*(9/12)=82500

weighter average shares for 2019=15000+82500=97500 shares

2)EPS= $10.10

EPS=earnings/weighted average shares

given

earnings=$985000

weighted average shares=97500 shares

EPS=$985000/97500=$10.10

note: the EPS figure is rounded upto 2 decimal points.

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