Reference no: EM132835441

Egg Corporation's accounting year ends on December 31. You are given information pertaining to changes during the two most recent years, to its common shares outstanding, as follows:

                                                                  20X7                  20X6
Shares outstanding, 1 January                        150,000           120,000
25% stock dividend, 1 July 20X6                                               30,000
2-for-1 stock split, 1 July 20X7                         150,000
New shares issued, 1 October 20X7                     50,000
Shares outstanding, 31 December                     350,000                      150,000

Income from Operations                                   $375,000                        $330,000

Required: You are now at December 31, 20X7.

Problem 1. For purposes of calculating EPS at the end of 20X7, with comparative statements being prepared on a two-year basis, determine the weighted-average number of shares outstanding for each year.

Problem 2. With comparative statements being prepared on a two-year basis, compute basic EPS for each year based on computations in requirement (1). There were no preferred shares or dilutive securities outstanding.