Reference no: EM132787235

Coronado Corporation is preparing the comparative financial statements to be included in the annual report to stockholders. Coronado employs a fiscal year ending May 31.

• Income from operations before income taxes for Coronado was $1,534,000 and $680,000, respectively, for fiscal years ended May 31, 2021 and 2020. Coronado experienced a loss from discontinued operations of $426,000 on March 3, 2021. A 20% combined income tax rate pertains to any and all of Coronado Corporation's profits, gains, and losses.
• Coronado's capital structure consists of preferred stock and common stock. The company has not issued any convertible securities or warrants and there are no outstanding stock options.
• Coronado issued 37,900 shares of $100 par value, 6% cumulative preferred stock in 2017. All of this stock is outstanding, and no preferred dividends are in arrears.
• There were 1,014,000 shares of $1 par common stock outstanding on June 1, 2019. On September 1, 2019, Coronado sold an additional 378,000 shares of the common stock at $18 per share. Coronado distributed a 20% stock dividend on the common shares outstanding on December 1, 2020. These were the only common stock transactions during the past 2 fiscal years.

Problem 1: Determine the weighted-average number of common shares that would be used in computing earnings per share on the current comparative income statement for:

a. Weighted-average number of common shares

(1) The year ended May 31, 2020.

(2) The year ended May 31, 2021.