Fazzino Corporation had 400,000 shares of common stock outstanding for the rst three months of the year.

Question:

Fazzino had 400,000 shares of outstanding for the ﬁrst three months of the year. The company issued 80,000 additional shares on April 1 and another 120,000 shares on September 1. Fazzino reported net income of $375,000 for the year ended December 31. Fazzino has no preferred stock.
Required:
(a) Compute Fazzino’s weighted-average number of shares of outstanding during the year.
(b) Compute Fazzino’s earnings per share for the year.
(c) Why is the weighted-average number of shares of outstanding during a year used for earnings per share rather than the number of shares outstanding at the end of the year?
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...