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Compute the weighted-average number of common shares

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Reference no: EM132016949

Problem - 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

4. Number of common shares issued and outstanding at December 31, 2014 - 4,200,000

5. A 2-for-1 stock split of Newton'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. (CMA adapted).

Reference no: EM132016949

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