Question 1 Assume that the following data relative to Kane Company for 2018 is a

Question

Question 1 Assume that the following data relative to Kane Company for 2018 is available: Net Income $2,870,000 Transactions in Common Shares Jan. 1, 2018, Beginning number Mar. 1, 2018, Purchase of treasury shares June 1, 2018, Stock split 2-1 Nov , 2018, issuance of shares Change Cumulative 680,000 (56,400) 623,600 623,600 1,247,200 210,000 1,457,200 6% Cumulative Convertible Preferred Stock Sold at par, convertible into 200,000 shares of common (adjusted for solit) $1,000,000 Stock Options Exercisable at the option price of $25 per share. Average market price in 2018, $30 (market price and option price adjusted for split). 81,000 shares Compute weighted average shares outstanding for 2018. Weighted average shares outstanding

Explanation / Answer

Weighted average shares outstanding 1,031,767

Working:

Date Details Change Cumulative Period Weighted average Jan.1 Beginning 680000 2/12 113333 Mar.1 Treasury shares -56400 623600 3/12 155900 June.1 Stock split 2:1 623600 1247200 5/12 519667 Nov.1 Issuance of shares 210000 1457200 2/12 242867 Weighted average shares 1031767

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