Newton Inc. uses a calendar year for financial reporting. The company is authorized to issue 9,000,000 shares of $10 par common stock. At no time has
Newton Inc. uses a calendar year for financial reporting. The company is authorized to issue 9,000,000 shares of $10 par common stock. At no time has Newton issued any potentially dilutive securities. Listed below is a summary of Newton’s common stock activities.
\r\n1. Number of common shares issued and outstanding at December 31, 2012 2,000,000
\r\n2. Shares issued as a result of a 10% stock dividend on September 30, 2013 200,000
\r\n3. Shares issued for cash on March 31, 2014 2,000,000
\r\nNumber of common shares issued and outstanding at December 31, 2014 4,200,000
\r\n4. A 2-for-1 stock split of Newton’s common stock took place on March 31, 2015
\r\nInstructions
\r\n(a) Compute the weighted-average number of common shares used in computing earnings per common share for 2013 on the 2014 comparative income statement.
\r\n(b) Compute the weighted-average number of common shares used in computing earnings per common share for 2014 on the 2014 comparative income statement.
\r\n(c) Compute the weighted-average number of common shares to be used in computing earnings per common share for 2014 on the 2015 comparative income statement.
\r\n(d) Compute the weighted-average number of common shares to be used in computing earnings per common share for 2015 on the 2015 comparative income statement.