Nagy Industries reported a net income of $659,369 on December 31, 2018. At the b

Question

Nagy Industries reported a net income of $659,369 on December 31, 2018. At the beginning of the year, the company had S40.000 common shares outstanding On April 1. the company sold 29.400 shares for cash On August 31, the company issued 52,800 additional shares as part of a merger on December 1, 2018, the company declared and issued a 8% stock dividend. Required: Compute Nagy's net income that would produce a basic EPS of $2 20 per share for 2018. (Round your answer to the nearest whole dollar.)

Explanation / Answer

Computation of Weighted Average number of shares Date Description Number of Shares Outstanding Months Calculation Weighted Average # of Shares 01.01.18 beginnig       540,000 12 (540000*12/12)           540,000 01.04.18 sold for cash          29,400 9 (29400*9/12)             22,050 31.08.18 Issued on Merger          52,800 4 (52800*4/12)             17,600 01.12.18 8% Stock Divdend (622,200*8%)          49,776 1 (49776*1/12)               4,148 Weighted Average number of Shares           583,798 Required Net income to produce basic EPS 2.20 per share for 2018 (583,798*2.20)       1,284,356

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