Weighted Average Shares At the beginning of 2014, Hardin Company had 350,000 sha

Question

Weighted Average Shares

At the beginning of 2014, Hardin Company had 350,000 shares of $10 par common stock outstanding. During the year, it engaged in the following transactions related to its common stock:

March 1 Issued 43,000 shares of stock at $24 per share.

June 1 Issued a 10% stock dividend.

July 1 Issued 8,000 shares of stock at $29 per share.

Aug. 31 Issued a 2-for-1 stock split on outstanding shares, reducing the par value to $5 per share.

Oct. 31 Reacquired 97,000 shares as treasury stock at a cost of $32 per share.

Nov. 30 Reissued 48,000 treasury shares at a price of $35 per share.

Required:

1. Determine the weighted average number of shares outstanding for computing the current earnings per share. Round your interim computations and final answer for the number of shares to nearest whole number.

2. Determine the number of common shares outstanding at December 31, 2014.

Explanation / Answer

Weighted Average Shares Number of shares Additional shares Total Months outstanding Weighted average 1-Jan beginning shares 350000 350000 0.166666667 58333 1-Mar Issued 43000 393000 0.25 98250 1-Jun stock dividend ( 393000*10%) 39300 432300 0.083333333 36025 1-Jul Issued 8000 440300 0.166666667 73383 31-Aug 2 for 1 stock split ( 440300 * 2) 440300 880600 0.166666667 146767 31-Oct treasury stock (reacquired) -97000 783600 0.083333333 65300 30-Nov treasury stock (reissued) 48000 831600 0.083333333 69300 Total 547358 1) Weighted average number of shares 547358 2) Number of common shares outstanding as at 31-Dec-14 831600

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