Question

On January 1, 2021, Marigold Corp. had 461,000 shares of common stock outstanding. During 2021, it had the following transactions that affected the Common Stock account.

February 1 Issued 124,000 shares
March 1 Issued a 10% stock dividend
May 1 Acquired 104,000 shares of treasury stock
June 1 Issued a 3-for-1 stock split
October 1 Reissued 61,000 shares of treasury stock

Required:
Determine the weighted-average number of shares outstanding as of December 31, 2021.

Answer 1

Marigold Corp.

Weighted-average number of shares outstanding as of December 31, 2021:

Date Outstanding Shares Number Weight Weighted

January 1, Beginning 461,000 12/12 461,000

February 1 Issue of new 124,000 11/12 113,667

March 1 Stock dividend 58,500 10/12 48,750

May 1 Treasury stock -104,000 8/12 -69,333

June 1 Issue 3-for-1 split 1,618,500 7/12 944,125

October 1 Reissue of Treasury Stock 61,000 3/12 15,250

Dec. 31 Total Outstanding shares 2,219,000 12 1,513,459

Step-by-step explanation:

a) Data and Calculations:

Date Outstanding Shares Number

January 1, Beginning 461,000

February 1 Issue of new 124,000

March 1 Stock dividend 58,500 (10% of 461,000 + 124,000)

May 1 Treasury stock -104,000

June 1 Issue 3-for-1 split 1,618,500 (539,500 x 3)

October 1 Reissue of Treasury Stock 61,000

Dec. 31 Total Outstanding shares 2,219,000

b) The months remaining to the end of the year are used to assign weights to the shares.