Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
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Textbook Question
Chapter 16, Problem 6MC
For purposes of computing the weighted average number of shares outstanding during the year, a midyear event that must be treated as occurring at the beginning of the year is the:
- a. issuance of stock warrants
- b. purchase of
treasury stock - c. sale of additional common stock
- d. declaration and issuance of a stock dividend
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The denominator of Earnings per share computation includes the weighted average number of common shares outstanding. Give three explanations why use the weighted average instead of the year-end common shares outstanding.
In computations of weighted average of shares outstanding, when a stock dividend or stock split occurs, the additional shares are
weighted by the number of days outstanding.
weighted by the number of months outstanding.
considered outstanding at the beginning of the year.
considered outstanding at the beginning of the earliest year reported.
TRUE OR FALSE
Earnings per share is found by taking the net income for the year divided by the number of common shares outstanding at the end of the year.
Chapter 16 Solutions
Intermediate Accounting: Reporting And Analysis
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Stockholders Equity: How to Calculate?; Author: Accounting University;https://www.youtube.com/watch?v=2jZk1T5GIlw;License: Standard Youtube License