Question

On January 1, 2021, Gridley Corporation had 375000 shares of its $2 par value common stock outstanding. On March 1, Gridley sold an additional 750000 shares on the open market at $20 per share. Gridley issued a 20% stock dividend on May 1. On August 1, Gridley purchased 420000 shares and immediately retired the stock. On November 1, 600000 shares were sold for $25 per share. What is the weighted-average number of shares outstanding for 2021

Answer 1

Answer:

1,075,000

Explanation:

Weighted average numbers of share account the weightage of outstanding numbers of the share in the year based on the outstanding period.

Outstanding Balances

375,000 share  for 2 months

Addition of new 750000 shares on March 1

1,125,000  shares (375,000+ 750,000) for 2 months

Stock dividend of 20% ( 1,125,000 x 20% = 225,000) on May 1

1,350,000  shares (1,125,000+ 225,000) for 3 months

Retirement of 420,000 Shares on August 1

930,000  shares (1,350,000 - 420,000) for 3 months

Issuance of 600000 shares on November 1

1530,000  shares (930,000 - 600,000) for 2 months

Schedule for weighted average numbers of shares is attached please find it.

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