Reference no: EM132576106

Question 1: At January 1, 2017, Elan Corporation had 300,000 common shares outstanding (no preferred issued). On March 1, the corporation issued 45,000 new shares to raise additional capital. On July 1, the corporation declared and issued a 2 for 1 stock split. On October 1, the corporation purchased on the open market 180,000 of its own shares at $35 each and retired them.

Required : Calculate the weighted average number of common shares outstanding to be used in calculating earnings per share for 2017.

Question 2: On December 31, 2020, the shareholders' equity of Finland Corporation shows the following:

Preferred shares-$ 6, no par, 8,000 shares outstanding................. $ 400,000

Common shares-no par, 60,000 shares outstanding.......................... 800,000

Retained earnings................................................................................. 240,000

Total shareholders' equity............................................................... $ 1,440,000

Assume that preferred dividends were last paid on December 31, 2018, and that all of the company's retained earnings are to be paid out in dividends on December 31, 2020.

Required : If the preferred shares are cumulative and fully participating, how much should each class of shares receive?