E16-16.
(EPS: Simple Capital Structure)
(LO 4) On January 1, 2018, Wilke Corp. had 480,000 shares ofcommon stock outstanding. During 2018, it had the followingtransactions that affected the common stock account.
February 1 | Issued 120,000 shares |
March 1 | Issued a 10% stock dividend |
May 1 | Acquired 100,000 shares of treasury stock |
June 1 | Issued a 3-for-1 stock split |
October 1 | Reissued 60,000 shares of treasury stock |
Instructions
(a)
Determine the weighted-average number of shares outstanding asof December 31, 2018.
(b)
Assume that Wilke Corp. earned net income of $3,456,000 during2018. In addition, it had 100,000 shares of 9%, $100 parnonconvertible, noncumulative preferred stock outstanding for theentire year. Because of liquidity considerations, however, thecompany did not declare and pay a preferred dividend in 2018.Compute earnings per share for 2018, using the weighted-averagenumber of shares determined in part (a).
(c)
Assume the same facts as in part (b), except that the preferredstock was cumulative. Compute earnings per share for 2018.
(d)
Assume the same facts as in part (b), except that net incomeincluded a loss from discontinued operations of $432,000 (net oftax). Compute earnings per share for 2018.
please explain detail ( i know the answer but i don'tunderstand)
