Question

Fazzino Corporation had 400,000 shares of common stock outstanding for the first three months of the year. The company issued 80,000 additional shares on April 1 and another 120,000 shares on September 1. Fazzino reported net income of $375,000 for the year ended December 31. Fazzino has no preferred stock.
Required:
(a) Compute Fazzino’s weighted-average number of shares of common stock outstanding during the year.
(b) Compute Fazzino’s earnings per share for the year.
(c) Why is the weighted-average number of shares of common stock outstanding during a year used for earnings per share rather than the number of shares outstanding at the end of the year?


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  • CreatedMarch 27, 2015
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