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    Weighted average shares calculation example

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    I have the following question that every time I compute the earnings per share, I keep coming up with two different answers. I'm trying to figure out what I am doing wrong:

    The following information is available for a corporation:

    January 1, 2011 Shares outstanding 1,250,000
    April 1, 2011 Shares issued 200,000
    July 1, 2011 Treasury shares purchased 75,000
    October 1, 2011 Shares issued in a 100% stock dividend 1,375,000

    The number of shares to be used in computing earnings per common share for 2011 is:

    a. 2,825,500
    b. 2,737,500
    c. 2,725,000
    d. 1,706,250

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    Solution Preview

    Since there is a 100% stock dividend on Oct 1, all shares prior to Oct 1 would be adjusted for 100% stock ...

    Solution Summary

    Provides steps necessary to calculate the weighted average shares from the data given.