During 20x6, Chester Corporation reported a net income of $1,529,500. On January 1, Chester had 1,400,000 shares of common stock outstanding. The company issued an additional 840,000 shares of common stock on October 1. In 20x6, the company had a simple capital structure. During 20x7, there were no transactions involving common stock, and the company reported net income of $2,016,000.

1. Determine the weighted-average number of common shares outstanding each year.

2. Compute earnings per share for each year.

Statement of Stockholders’ Equity