Brief Exercise 1611 Grouper Corporation had 303000 shares of

Brief Exercise 16-11

Grouper Corporation had 303,000 shares of common stock outstanding on January 1, 2017. On May 1, Grouper issued 32,400 shares.

(a) Compute the weighted-average number of shares outstanding if the 32,400 shares were issued for cash.

(b) Compute the weighted-average number of shares outstanding if the 32,400 shares were issued in a stock dividend.

Solution

(a) Compute the weighted-average number of shares outstanding if the 32,400 shares were issued for cash.

Weighted average number of share outstanding = (303000*12/12+32400*8/12) = 324600 Shares

(b) Compute the weighted-average number of shares outstanding if the 32,400 shares were issued in a stock dividend.

Weighted average number of share outstanding = (303000*12/12+32400*12/12) = 335400 Shares