Question

The Heath Corporation reported net income for 20X1 of $177,500. Heath began the year with 100,000 shares of $5 par value common shares outstanding and 2,500 shares of $100 par value 8% preferred shares outstanding. On October 1, Heath sold 10,000 shares of common stock for $6 per share. Heath paid dividends to the common shareholders in December. The weighted average number of common shares used to compute earnings per share for 20X1 is:

Answer 1

Answer:

107,500 shares

Explanation:

weighted average number of common shares = 100,000 shares + 10,000 shares x 3/12

                                                                             = 107,500 shares

The weighted average number of common shares used to compute earnings per share for 20X1 is: 107,500 shares