Gogeon Inc. is publicly traded and uses a calendar year for financial reporting. The company is authorized

Question:

Gogeon Inc. is publicly traded and uses a calendar year for financial reporting. The company is authorized to issue 50 million common shares. At no time has Gogeon issued any potentially dilutive securities. The following list is a summary of Gogeon's common share activities:

Number of common shares issued and outstanding at December 31, 2015

6500000

Shares issued as a result of a 10% stock dividend on September 30, 2016

650000

Shares issued for cash on March 31, 2017

2500

Number of common shares issued and outstanding at December 31, 2017

9650000

Gogeon issued its 2017 financial statements on February 28, 2018. A 3-for-1 stock split of Gogeon's common shares occurred on March 31, 2018.

Instructions:

(a) Calculate the weighted average number of common shares to use in calculating earnings per common share for 2016 on the 2016 comparative income statement.

(b) Calculate the weighted average number of common shares to use in calculating earnings per common share for 2016 on the 2017 comparative income statement

(c) Calculate the weighted average number of common shares to use in calculating earnings per common share for 2017 on the 2017 comparative income statement

(d) Calculate the weighted average number of common shares to use in calculating earnings per common share for 2017 on the 2018 comparative income statement

(e) Calculate the weighted average number of common shares to use in calculating earnings per common share for 2018 on the 2018 comparative income statement

(f) Referring to how EPS is used and applied, discuss why the weighted average number of common shares must be adjusted for stock dividends and stock splits. How is this information helpful for analysis by financial statement users?

(g) Assume Gogeon Inc. was privately owned and used ASPE. How would the EPS requirements differ from the requirements using IFRS?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...