Question

Carla Vista Corporation had 588,000 common shares outstanding on January 1, 2020. On May 1, Carla Vista issued 58,800 shares.

Calculate the weighted average number of shares outstanding for the year ended December 31, 2020, if the 58,800 shares were issued for cash. (Round answer to 0 decimal places, e.g. 5,275.)
Weighted average number of shares outstanding _______ shares

Answer 1

To calculate the weighted average number of shares outstanding, multiply the number of shares outstanding for each period by the length of time they were outstanding, sum them up, and divide by the total length of the time period.

Step-by-step explanation:

To calculate the weighted average number of shares outstanding, we need to consider the number of shares outstanding during each period of time.

On January 1, Carla Vista Corporation had 588,000 common shares outstanding. On May 1, they issued an additional 58,800 shares.

To find the weighted average number of shares outstanding, we multiply the number of shares outstanding for each period by the length of time they were outstanding, sum them up, and then divide by the total length of the time period.

So, the weighted average number of shares outstanding is:

((588,000 shares * 4 months) + (646,800 shares * 8 months)) / 12 months = 621,400 shares.