Computing EPS: Simple Capital Structure and Net Loss

Grace Corp. had 100,000 common shares outstanding as of January 1, and declared a 1-for-2 reverse stock split on March 31. In addition, the company bought 5,000 shares for the treasury on August 31, and 2,000 shares of stock were issued on November 1 in exchange for legal services. The company also had 1,000 shares of 5%, $10 par, cumulative, nonconvertible preferred stock outstanding for the year. No common or preferred stock dividends were declared during the year. The company suffered a net loss for the year of $100,000.

Required Compute basic EPS. Note: Round weighted average common shares outstanding to the nearest whole number. Note: Use a negative sign with a loss.

Calculation of Weighted Shares Outstanding:

\begin{tabular}{|l|l|} \hline & \multicolumn{1}{|c|}{WeightedAvg.SharesOutstanding} \\ \hline Inclusive Dates & \\ \hline Jan. - Mar. & \\ \hline Apr. - Aug. & \\ \hline Sept. - Oct. & \\ \hline Nov. - Dec. & \\ \hline & \\ \hline \hline \end{tabular}