Intermediate Accounting II – Chapter 16 Homework Assignment

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Description

E16-15 (Weighted-Average Number of Shares) Newton Inc. uses a calendar year for financial reporting. The company is authorized to issue
9,000,000 shares of $10 par common stock. At no time has Newton issued any
potentially dilutive securities. Listed below is a summary of Newton’s common stock activities.
1. Number of common shares issued and outstanding at December 31, 2012 2,000,000
2. Shares issued as a result of a 10% stock dividend on September 30, 2013 200,000
3. Shares issued for cash on March 31, 2014 2,000,000
Number of common shares issued and outstanding at December 31, 2014 4,200,000
4. A 2-for-1 stock split of Gogean’s common stock took place on March 31, 2015

Instructions:
“(a) Compute the weighted average number of common shares used in computing earnings per
common share for 2013 on the 2014 comparative income statement.”

“(b) Compute the weighted average number of common shares used in computing earnings per
common share for 2014 on the 2014 comparative income statement.”

“(c) Compute the weighted average number of common shares to be used in computing earnings per
common share for 2014 on the 2015 comparative income statement.”
“(d) Compute the weighted average number of common shares to be used in computing earnings per
common share for 2015 on the 2015 comparative income statement.”

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