Reference no: EM132233574

Question - Culver Corporation is preparing the comparative financial statements for the annual report to its shareholders for fiscal years ended May 31, 2017, and May 31, 2018. The income from operations for the fiscal year ended May 31, 2017, was $1,791,000 and income from continuing operations for the fiscal year ended May 31, 2018, was $2,378,000. In both years, the company incurred a 10% interest expense on $2,345,000 of debt, an obligation that requires interest-only payments for 5 years. The company experienced a loss from discontinued operations of $594,000 on February 2018. The company uses a 40% effective tax rate for income taxes.

The capital structure of Culver Corporation on June 1, 2016, consisted of 973,000 shares of common stock outstanding and 19,800 shares of $50 par value, 6%, cumulative preferred stock. There were no preferred dividends in arrears, and the company had not issued any convertible securities, options, or warrants.

On October 1, 2016, Culver sold an additional 494,000 shares of the common stock at $20 per share. Culver distributed a 20% stock dividend on the common shares outstanding on January 1, 2017. On December 1, 2017, Culver was able to sell an additional 805,000 shares of the common stock at $22 per share. These were the only common stock transactions that occurred during the two fiscal years.

1) Determine the weighted-average number of shares that Culver Corporation would use in calculating earnings per share for the fiscal year ended: Weighted-average number of shares

May 31 2017

May 31 2018