Reference no: EM132482643

Point 1: The Spencer Company had 100,000 shares outstanding on January 1, 2016. On April 1, 2016 Spencer issued 80,000 shares. On July 1, 2016 Spencer issued a 10% dividend. On September 1 Spencer repurchased 18,000 shares of treasury stock. On December 31, 2016 Spenser declared a 2 to 1 stock split.

Required:

Question 1: What are the weighted average shares at December 31, 2016?

Inclusive Dates: 1/1-4/1

Transaction: 100,000 shares o/s

Accumulated share o/s: 100,000

Stock Dividend Restatement: 1.1

Stock Split Restatement: 2.0

Fraction of Year: 1/4

Weighted Shares: 55,000

Inclusive Dates: 4/1-7/1

Transaction: Issued 80,000 shares

Accumulated share o/s: 180,000

Stock Dividend Restatement: 1.1

Stock Split Restatement: 2.0

Fraction of Year: 1/4

Weighted Shares: 99,000

Inclusive Dates: 7/1 - 9/1

Transaction: 10% divided 18,000 shares

Accumulated share o/s: 198,000

Stock Dividend Restatement: 0

Stock Split Restatement: 2.0

Fraction of Year: 1/6

Weighted Shares: 66,000

Inclusive Dates: 9/1 - 12/31

Transaction: 18,000 Treasury shares

Accumulated share o/s: 180,000

Stock Dividend Restatement: 0

Stock Split Restatement: 2.0

Fraction of Year: 1/3

• Weighted Shares: 120,000
• Weight average share = 340,000
• Stock dividend = 1/1 100,000 + 4/1 80,000 = 180,000 x 10% = 18,000 shares