Flagstad Inc. presented the following data. Net income ..............$2,500,000 Preferred stock: 50,000 shares outstanding, $100 par, 8%
Question:
Flagstad Inc. presented the following data.
Net income ..............$2,500,000
Preferred stock: 50,000 shares outstanding,
$100 par, 8% cumulative, not convertible ....5,000,000
Common stock: Shares outstanding 1/1 ....750,000
Issued for cash, 5/1 ............300,000
Acquired treasury stock for cash, 8/1 .....150,000
2-for-1 stock split, 10/1
Instructions
Compute earnings per share.
Step by Step Answer:
Event Dates Outstanding Shares Outstanding Restatement Fraction of Year Weighted Shares Beginnin...View the full answer
Intermediate Accounting principles and analysis
ISBN: 978-0471737933
2nd Edition
Authors: Terry d. Warfield, jerry j. weygandt, Donald e. kieso
Related Video
Treasury stock refers to shares of a company\'s own stock that the company has bought back from its shareholders and now holds as a form of asset on its balance sheet. When a company buys back its own stock, it reduces the number of outstanding shares in the market, which can potentially increase the value of the remaining shares. Treasury stock can be acquired through a variety of methods, such as open market purchases, negotiated transactions, or as a result of converting convertible securities. Companies may buy back their own shares for a number of reasons, including to return capital to shareholders, to signal confidence in the company\'s future, or to use the shares for employee stock option plans. While treasury stock does not pay dividends, it can be reissued by the company at a later time, which could dilute the value of the remaining shares. Companies are required to report their treasury stock holdings in their financial statements.
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