Reference no: EM132586560

On January 1, 2010, Chang Corp. had 580,000 shares of common stock outstanding. During 2010, it had the following transactions that affected the common stock account.

February 1 Issued 200,000 shares

March 1 Issued a 15% stock dividend

May 1 Acquired 150,000 shares of treasury stock

June 1 Issued a 3-for-1 stock split

October 1 Reissued 75,000 shares of treasury stock

Instructions

Question (i) Determine the weighted-average number of shares outstanding as of December 31, 2010.

Question (ii) Assume that Chang Corp. earned net income of Tk. 9,256,000 during 2010. In addition, it had 100,000shares of 9%, Tk. 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 2010. Compute earnings per share for 2010, using the weighted-average number of shares determined in part (a).

Question (iii) Assume the same facts as in part (b), except that the preferred stock was cumulative. Compute earnings per share for 2010.

Question (iv) Assume the same facts as in part (b), except that net income included an extraordinary gain of Tk. 964,000 and a loss from discontinued operations of Tk. 6432,000. Both items are net of applicable income taxes. Compute earnings per share for 2010.