During 2011, Arthur Corporation reported a net income of $3,059,000. On January

Question

During 2011, Arthur Corporation reported a net income of $3,059,000. On January 1, Arthur had 2,800,000 shares of common stock outstanding. The company issued an additional 1,680,000 shares of common stock on October 1. In 2011, the company had a simple capital structure. During 2012, there were no transactions involving common stock, and the company reported net income of $4,032,000.
Determine the weighted-average number of common shares outstanding each year and the earnings per share.

This seems like a really basic question yet everytime I enter my answer It's fully marked wrong.
2800000 x 9/12 =2100000
1600000 X 3/12 = 420000
252000 = 2011 Weighted average .. For 2012 there is no common stock so I leave it at 0
3059000/2520000+ 1.21 per share for 2011

Explanation / Answer

= 4480000 Common Stock Beginning 2800000 New stock issue on Oct 1 1680000 In 2800000 stock we use for 12 months 2800000 In 1680000 we used 3 months 420000 (1680000 * 3/12) Total O/S Stock for the year 2011 3220000 Also we can calculate like this: 2800000 * 9/12 2100000 (2800000 + 1680000) = 4480000 * 3/12 1120000 Total O/S Stock for the year 2011 3220000 Earning per Share in 2011 = Net in come in 2011 / Stock in 2011 = 3059000 / 3220000 = $0.95 In 2012 total stock used for full year (2800000 + 1680000) Earning per Share in 2012 = Net income in 2012 / Stock in 2012 = 4032000 / 4480000 = $0.90 Thank you.... Common Stock Beginning 2800000 New stock issue on Oct 1 1680000 In 2800000 stock we use for 12 months 2800000 In 1680000 we used 3 months 420000 (1680000 * 3/12) Total O/S Stock for the year 2011 3220000 Also we can calculate like this: 2800000 * 9/12 2100000 (2800000 + 1680000) = 4480000 * 3/12 1120000 Total O/S Stock for the year 2011 3220000 Earning per Share in 2011 = Net in come in 2011 / Stock in 2011 = 3059000 / 3220000 = $0.95 In 2012 total stock used for full year (2800000 + 1680000) Earning per Share in 2012 = Net income in 2012 / Stock in 2012 = 4032000 / 4480000 = $0.90

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