Question

g On January 1, 2021, Sealed Air had 100,000 shares of common stock outstanding. The following transactions occurred during 2021: March 1: Reacquired 3,900 shares, accounted for as treasury stock. September 30: Sold all the treasury shares. December 1: Sold 12,900 new shares for cash. December 31: Reported a net income of $306,750. Required: Calculate Sealed Air's basic earnings per share for the year ended December 31, 2021. (Round your answer to 2 decimal places.)

Answer 1

$3.10

Step-by-step explanation:

Outstanding on Jan 1 = 100,000*12/12 = 100,000

Less: Treasury Stock 3,900*10/12 = (3,250)

Add: Sold Treasury Shares 3,900*3/12 = 975

Add: New Shares Sold 12,900*1/12 = 1075

Weighted Average of Equity Shares = 100,000 - 3,250 + 975 + 1,075

Weighted Average of Equity Shares = 98,800

Basic Earnings per Share = Net Income/Weighted Average of Equity Shares outstanding

Basic Earnings per Share = $306,750/98,800 shares

Basic Earnings per Share = $3.10475709

Basic Earnings per Share = $3.10

So, Sealed Air's basic earnings per share for the year ended December 31, 2021 is $3.10.