Question: Newton Inc uses a calendar year for financial reporting The

Newton Inc. uses a calendar year for financial reporting. The company is authorized to issue 9,000,000 shares of $10 par common stock. At no time has Newton issued any potentially dilutive securities. Listed below is a summary of Newton’s common stock activities.
1. Number of common shares issued and outstanding at December 31, 2005 ....2,000,000
2. Shares issued as a result of a 10% stock dividend on September 30, 2006 .....200,000
3. Shares issued for cash on March 31, 2007 ...................2,000,000
Number of common shares issued and outstanding at December 31, 2007 .....4,200,000
4. A 2-for-1 stock split of Newton’s common stock took place on March 31, 2008.
Instructions
(a) Compute the weighted-average number of common shares used in computing earnings per common share for 2006 on the 2007 comparative income statement.
(b) Compute the weighted-average number of common shares used in computing earnings per common share for 2007 on the 2007 comparative income statement.
(c) Compute the weighted-average number of common shares to be used in computing earnings per common share for 2007 on the 2008 comparative income statement.
(d) Compute the weighted-average number of common shares to be used in computing earnings per common share for 2008 on the 2008 comparative income statement.


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  • CreatedMay 15, 2012
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