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Martinez Corporation is preparing the comparative financial statements to be included in the annual report to stockholders. Martinez employs a fiscal year ending May 31.
Martinez Corporation is preparing the comparative financial statements to be included in the annual report to stockholders. Martinez employs a fiscal year ending May 31. Income from operations before income taxes for Martinez was $1.445,000 and $635,000, respectively, for fiscal years ended May 31, 2021 and 2020. Martinez experienced a loss from discontinued operations of $367,000 on March 3, 2021. A 20% combined income tax rate pertains to any and all of Martinez Corporation's profits, gains, and losses. Martinez's capital structure consists of preferred stock and common stock. The company has not issued any convertible securities or warrants and there are no outstanding stock options. Martinez issued 37,100 shares of $100 par value, 6% cumulative preferred stock in 2017. All of this stock is outstanding, and no preferred dividends are in arrears. There were 1,003,200 shares of $1 par common stock outstanding on June 1, 2019. On September 1. 2019, Martinez sold an additional 422,400 shares of the common stock at $18 per share. Martinez distributed a 20% stock dividend on the common shares outstanding on December 1, 2020. These were the only common stock transactions during the past 2 fiscal years. (a) Determine the weighted average number of common shares that would be used in computing earnings per share on the current comparative income statement for: Weighted average number of common shares (1) The year ended May 31, 2020. 1332900 (2) The year ended May 31, 2021
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