Question: Computing EPS: Simple Capital Structure and Net Loss Grace Corp. had 200,000 common shares outstanding as of January 1, and declared a 1-for-2 reverse stock

Computing EPS: Simple Capital Structure and Net Loss

Grace Corp. had 200,000 common shares outstanding as of January 1, and declared a 1-for-2 reverse stock split on March 31. In addition, the company bought 10,000 shares for the treasury on August 31, and 4,000 shares of stock were issued on November 1 in exchange for legal services. The company also had 2,000 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 $200,000.

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:

		Weighted
		Avg. Shares
	Inclusive Dates	Outstanding
	Jan. - Mar.
	Apr. - Aug.
	Sept. - Oct.
	Nov. - Dec.

		Numerator		Denominator		Per Share
	Basic EPS		/		=

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