On January 1, 2021, Monty Corp. had 459,000 shares of common stock outstanding. During 2021, it had the following transactions that effected the Common Stock account.

February 1 Issued 123,000 shares

March 1 Issued a 10% stock dividend

May 1 Acquired 101,000 shares of treasury stock

June 1 Issued a 3-for-1 stock split

October 1 Reissued 57,000 shares of treasury stock

Required

a. Determine the weighted-average number of shares outstanding as of December 31, 2021.

b. Assume the Monty Corp. earned net income of $3,577,000 during 2021. In addition, it had 95,000 shares of the 9%, $100 par nonconvertible, noncumulative preferred stock outstanding for the entire year. Because of liquidity considerations, however, the company did not declare and pay a preferred dividend in 2021. Compute earnings per share for 2021, using the weighted-average number of shares determined in part (a).

c. Assume the same facts as in part (b), except that the preferred stock was cumulative. Compute earnings per share for 2021. 

Answer rating: 100% (QA)

To solve these questions lets calculate the weightedaverage number of shares outstanding as of December 31 2021 and then use that information to compu... View the full answer