Exercise 16-16

On January 1, 2018, Blue Corp. had 459,000 shares of common stock outstanding. During 2018, it had the following transactions that affected the Common Stock account.

February 1 Issued 116,000 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 58,000 shares of treasury stock

1. Determine the weighted-average number of shares outstanding as of December 31, 2018.

The weighted-average number of shares outstanding ____

2. Assume that Blue Corp. earned net income of $3,471,000 during 2018. In addition, it had 101,000 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 2018. Compute earnings per share for 2018, using the weighted-average number of shares determined in part (a). (Round answer to 2 decimal places, e.g. $2.55.)

Earnings Per Share $___

3. Assume the same facts as in part (b), except that the preferred stock was cumulative. Compute earnings per share for 2018. (Round answer to 2 decimal places, e.g. $2.55.)

Earnings Per Share $____

4. Assume the same facts as in part (b), except that net income included a loss from discontinued operations of $436,000 (net of tax). Compute earnings per share for 2018. (Round answer to 2 decimal places, e.g. $2.55.)