Question: Fazzino Corporation had 400 000 shares of common stock outstanding for

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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