xercise 16-16 On January 1, 2018, Culver Corp. had 474,000 shares of common stoc
ID: 2411996 • Letter: X
Question
xercise 16-16 On January 1, 2018, Culver Corp. had 474,000 shares of common stock outstanding. During 2018, it had the following transactions that affected the Common Stock account. February 1 Issued 126,000 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 62,000 shares of treasury stock Determine the weighted-average number of shares outstanding as of December 31, 2018. The weighted-average number of shares outstanding LINK TO TEXT Assume that Culver Corp. earned net income of $3,346,000 during 2018. In addition, it had 103,000 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 $
Explanation / Answer
(a)
Event
Dates
Outstanding
Shares
Outstanding
Restatement
Fraction
of Year
Weighted
Shares
Beginning balance
Jan. 1–Feb. 1
474,000
1.1 X 3.0
1/12
130,350
Issued shares
Feb. 1–Mar. 1
600,000
1.1 X 3.0
1/12
165,000
Stock dividend
Mar. 1–May 1
660,000
3.0
2/12
330,000
Reacquired shares
May 1–June 1
560,000
3.0
1/12
140,000
Stock split
June 1–Oct. 1
1,680,000
4/12
560,000
Reissued shares
Oct. 1–Dec. 31
1,742,000
3/12
435,500
Weighted-average number of shares outstanding
1,760,850
(b)
Earnings Per Share =
$3,346,000 (Net Income)
= $1.90
1,760,850 (Weighted-average Number Shares Outstanding)
Event
Dates
Outstanding
Shares
Outstanding
Restatement
Fraction
of Year
Weighted
Shares
Beginning balance
Jan. 1–Feb. 1
474,000
1.1 X 3.0
1/12
130,350
Issued shares
Feb. 1–Mar. 1
600,000
1.1 X 3.0
1/12
165,000
Stock dividend
Mar. 1–May 1
660,000
3.0
2/12
330,000
Reacquired shares
May 1–June 1
560,000
3.0
1/12
140,000
Stock split
June 1–Oct. 1
1,680,000
4/12
560,000
Reissued shares
Oct. 1–Dec. 31
1,742,000
3/12
435,500
Weighted-average number of shares outstanding
1,760,850
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