Question

On January 1, 2018, Wilke Corp. had 480,000 shares of common stock outstanding. During 2018, it had the following transactions that affected the Common Stock account.February 1Issued 120,000 sharesMarch 1Issued a 10% stock dividendMay 1Acquired 100,000 shares of treasury stockJune 1Issued a 3-for-1 stock splitOctober 1Reissued 60,000 shares of treasury stock(a) Determine the weighted-average number of shares outstanding as of December 31, 2018.

Answer 1

W-A outstanding shares: 588,333

Step-by-step explanation:

We must multiply the shares over the months outstanding from the transaction to year-end

January 1st : 480,000 x 12/12 = 480,000

February 1st: 120,000 x 11/12 = 110,000

March 1st: 10% stock dividends:

(480,000 + 120,000) x 10% = 60,000 x 10/12 = 50,000

May 1st: treasury stock:

100,000 x 8/12 = (66,667)

October 1st reissued shares:

60,000 x 3/12 = 15,000

weighted average oustanding shares: 588,333