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Computing EPS: Simple Capital Structure and Net Loss Grace Corp. had 180,000 common shares outstanding as of January 1, and declared a 1-for-2 reverse
Computing EPS: Simple Capital Structure and Net Loss Grace Corp. had 180,000 common shares outstanding as of January 1, and declared a 1-for-2 reverse stock split on March 31. In addition, the company bought 9,000 shares for the treasury on August 31, and 3,600 shares of stock were issued on November 1 in exchange for legal services. The company also had 1,800 shares of 5%, $10 par, cumulative, nonconvertible preferred stock outstanding for the year. No common or preferred stock dividends were declared during the year. The company suffered a net loss for the year of $180,000. Required Compute basic EPS. Note: Round weighted average common shares outstanding to the nearest whole number. Note: Use a negative sign with a loss. Calculation of Weighted Shares Outstanding: Inclusive Dates Jan. - Mar. Apr. - Aug. Sept. - Oct. Nov.-Dec. Weighted Avg. Shares Outstanding 45,000 x 37,500 13,500 14,100 110,100 Numerator Denominator Per Share Basic EPS $ 180,000 x / 110,100 x = $ 1.63
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