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Question
On January 1, 2018, Wilke Corp. had 480,000 shares of common stock outstanding. During 2018, it had the following transactions that affected the common stock account.
- February 1 Issued 120,000 shares
- March 1 Issued a 10% stock dividend
- May 1 Acquired 100,000 shares of treasury stock
- June 1 Issued a 3-for-1 stock split
- October 1 Reissued 60,000 shares of treasury stock
Instructions
- a. Determine the weighted-average number of shares outstanding as of December 31, 2018.
- b. Assume that Wilke Corp. earned net income of $3,456,000 during 2018. In addition, it had 100,000 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).
- c. Assume the same facts as in part (b), except that the preferred stock was cumulative. Compute earnings per share for 2018.
- d. Assume the same facts as in part (b), except that net income included a loss from discontinued operations of $432,000 (net of tax). Compute earnings per share for 2018.
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