E16.16 (EPS: Simple Capital Structure) On January 1, 2021, Wilke Corp. had 480,000
shares of common stock outstanding. During 2021, it had the following transactions that aff ected the
common stock account.
February 1 - Issued 120,000 shares
March 1 - Issued a 10% stock dividend
May 1 - Acquired 100,000 shares of treasury stock
June 1 - Issued a 3-for-1 stock split
October 1 - Reissued 60,000 shares of treasury stock
a. Determine the weighted-average number of shares outstanding as of December 31, 2021.
b. Assume that Wilke Corp. earned net income of $3,456,000 during 2021. In addition, it had 100,000
shares of 9%, $100 par nonconvertible, noncumulative preferred stock outstanding for the entire
year. Because of liquidity considerations, however, the company did not declare and pay a preferred
dividend in 2021. Compute earnings per share for 2021, using the weighted-average number of
shares determined in part (a).
c. Assume the same facts as in part (b), except that the preferred stock was cumulative. Compute earnings
per share for 2021.
d. Assume the same facts as in part (b), except that net income included a loss from discontinued
operations of $432,000 (net of tax). Compute earnings per share for 2021.