Question

Brief Exercise 16-10 Grouper Corporation had 138,000 shares of stock outstanding on January 1, 2020. On May 1, 2020, Grouper issued 72,000 shares. On July 1, Grouper purchased 10,200 treasury shares, which were reissued on October 1. Compute Grouper’s weighted-average number of shares outstanding for 2020. Weighted-average number of shares outstanding

Answer 1

183,450 shares

Solution:

The following is the approximation of the weighted average share number:

January 1 to April = 138,000 shares  for 4 months = 46,000 shares

May to June = 72,000 shares + 138,000 shares

                     = 210,000 shares for 2 months = 35,000 shares

July to September = 210,000 shares - 10,200 shares

                               = 199,800 shares for 3 months = 49,950 shares

October to December = 199,800 + 10,200 shares

                                     = 210,000 for 3 months = 52,500 shares

Now weights average number of shares is 183,450 shares