"2-22-2010 - EXERCISE 16-16(a Event Dates...

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EXERCISE 16-16 (a) Event Dates Outstanding Shares Outstanding Restatement Fraction of Year Weighted Shares Beginning balance Jan. 1–Feb. 1 480,000 1.2 x 3.0 1/12 144,000 Issued shares Feb. 1–Mar. 1 600,000 1.2 x 3.0 1/12 180,000 Stock dividend Mar. 1–May 1 720,000 3.0 2/12 360,000 Reacquired shares May 1–June 1 620,000 3.0 1/12 155,000 Stock split June 1–Oct. 1 1,860,000 4/12 620,000 Reissued shares Oct. 1–Dec. 31 1,920,000 3/12 480,000 Weighted-average number of shares outstanding 1,939,000 (b) Earnings Per Share = $3,256,000 (Net Income) = $1.68 1,939,000 (Weighted-Average Shares) (c) Earnings Per Share = $3,256,000 – $900,000 = $1.22 1,939,000 1
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EXERCISE 16-16 (Continued) (d) Income from continuing operations a ...................................... $1.46 Loss from discontinued operations b ....................................... (.22 ) Income before extraordinary item ......................................... 1.24 Extraordinary gain c ................................................................ .44 Net income ............................................................................. $1.68 a Net income ............................................................................. $3,256,000 Deduct extraordinary gain ..................................................... (864,000) Add loss from discontinued operations ................................. 432,000 Income from continuing operations ..................................... $2,824,000 a $2,824,000 = $1.46 1,939,000 b $(432,000) = $(.22) 1,939,000 c $864,000 = $.44 1,939,000 2
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EXERCISE 16-17 Event Dates Outstanding Shares Outstanding Fraction of Year Weighted Shares Beginning balance Jan. 1–May 1 210,000 4/12 70,000 Issued shares May 1–Oct. 31 218,000 6/12 109,000 Reacquired shares Oct. 31–Dec. 31
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