Final answer:
To calculate Douglas Corporation's weighted-average number of shares outstanding for 2012, you need to consider the number of shares at different points in time. By following the steps explained in the detailed answer, you can calculate the weighted average to be 155,000 shares.
Step-by-step explanation:
In order to calculate the weighted-average number of shares outstanding for Douglas Corporation in 2012, we need to consider the number of shares outstanding at different points in time. Here's how we can calculate it:
- Shares outstanding on January 1, 2012: 120,000
- On May 1, 2012, Douglas issued 60,000 additional shares, making the total shares outstanding 120,000 + 60,000 = 180,000
- On July 1, Douglas bought back and held 10,000 treasury shares, so the number of outstanding shares decreased to 180,000 - 10,000 = 170,000
- On October 1, the 10,000 treasury shares were reissued, so the total shares outstanding remained at 170,000
To calculate the weighted-average number of shares, we need to consider the different time periods and the number of shares outstanding during each period. In this case, we have 3 different time periods:
- January 1 to April 30: 120,000 shares
- May 1 to June 30: 180,000 shares
- July 1 to December 31: 170,000 shares
We can calculate the weighted-average number of shares by multiplying the number of shares outstanding during each period by the length of the period, and then summing these values:
(120,000 shares x 4 months) + (180,000 shares x 2 months) + (170,000 shares x 6 months) = 480,000 + 360,000 + 1,020,000 = 1,860,000
Next, we divide the sum by the total number of months in the year:
1,860,000 shares / 12 months = 155,000 shares
Therefore, Douglas Corporation's weighted-average number of shares outstanding for 2012 is 155,000 shares.