On January 1 2018 Shamrock Corp had 478000 shares of common

On January 1, 2018, Shamrock Corp. had 478,000 shares of common stock outstanding. During 2018, it had the following transactions that affected the Common Stock account. February 1 Issued 120,000 shares March 1 Issued a 10% stock dividend May 1 Acquired 102,000 shares of treasury stock June 1 Issued a 3-for-1 stock split October 1 Reissued 59,000 shares of treasury stock Determine the weighted-average number of shares outstanding as of December 31, 2018. The weighted-average number of shares outstanding LINK TO TEXT Assume that Shamrock Corp. earned net income of $3,582,000 during 2018. In addition, it had 100,000 shares of 9%, $100 par nonconvertible, noncumulative preferred stock outstanding for the entire year. Because of liquidity considerations, however, the company did not declare and pay a preferred dividend in 2018.

Compute earnings per share for 2018, using the weighted-average number of shares determined in part (a). (Round answer to 2 decimal places, e.g. $2.55.) Earnings Per Share $

Assume the same facts as in part (b), except that the preferred stock was cumulative. Compute earnings per share for 2018. (Round answer to 2 decimal places, e.g. $2.55.) Earnings Per Share

Solution

1) Weighted Average Outstanding shares as on Dec 31, 2018 :

2) EPS (for non-cumulative interest not been paid, not made payable as non-cumulative) =( Net Income $3582000 - preferred dividend $0 )/ Shares outstanding 1724250 shares = $2.08 per share

3) EPS (for cumulative interest not been paid, but made payable) =

=( Net Income $3582000 - preferred dividend $10,000,000 * 9% )/ Shares outstanding 1724250 shares

= (3582000 - $900,000) / 1724250 = $1.56 per share