# Calculating weighted average number of common shares outstanding

If McCumbers Inc. earned net income of \$595,000 for the current year (2012) and preferred dividends of \$66,000 during that period. At December 13, 2012 a 2 for 1 common stock split had been executed and that 20,000 new common stock shares had been issued on May 1, 2012 and 5,000 shares of treasury stock had been acquired on November 1st.
Determine the following: a. The 2012 net income available to common Shareholders; b. The weighted average common shares outstanding; c. The basic earnings per share (EPS).

I got Part A done, I'm just having difficulty with B and C.

 Jem100 Posts: 10, Reputation: 1 New Member #2 Jul 27, 2012, 04:10 PM
Also, you might need the previous part to complete this.
If McCumbers Inc. has the following stockholders' equity section of its balance sheet at December 31, 2011:
Preferred Stock,6%,\$100 par value, 1,000 shares authorized, issued/ and outstanding... \$1,100,000
Common Stock,\$10 par value, 250,000 shares authorized/ 120/000 shares issued and outstanding... 1,200,000
Retained Earnings... 86, 000
Total Stockholders' Equity \$3,570,000

Required: 1} Determine the 2011 book value per share of preferred stock. 2) Determine the 2011 book value per share of common stock.
 paraclete Posts: 1,922, Reputation: 614 Ultra Member #3 Jul 27, 2012, 04:14 PM
Quote:
 Originally Posted by Jem100 If McCumbers Inc. earned net income of \$595,000 for the current year (2012) and preferred dividends of \$66,000 during that period. At December 13, 2012 a 2 for 1 common stock split had been executed and that 20,000 new common stock shares had been issued on May 1, 2012 and 5,000 shares of treasury stock had been acquired on November 1st. Determine the following: a. The 2012 net income available to common Shareholders; b. The weighted average common shares outstanding; c. The basic earnings per share (EPS). I got Part A done, I'm just having difficulty with B and C.
You don't have enough information is there more to the question. To calculate a weighted average in this case you will need three numbers pre Dec, post Dec and May 1
 Jem100 Posts: 10, Reputation: 1 New Member #4 Jul 27, 2012, 04:21 PM
Quote:
 Originally Posted by paraclete you don't have enough information is there more to the question. to calculate a weighted average in this case you will need three numbers pre Dec, post Dec and May 1
I replied to my own question with the more information part. I forgot that it was referencing a previous question. Here it is again

If McCumbers Inc. has the following stockholders' equity section of its balance sheet at December 31, 2011:
Preferred Stock, 6%, \$100 par value, 1,000 shares authorized, issued, and outstanding... \$1,100,000
Common Stock,\$10 par value, 250,000 shares authorized, 120,000 shares issued and outstanding... 1,200,000
Retained Earnings... 860,000
Total Stockholders' Equity \$3,570,000

Required: 1} Determine the 2011 book value per share of preferred stock. 2) Determine the 2011 book value per share of common stock.

With this question I wasn't sure on part 1
 paraclete Posts: 1,922, Reputation: 614 Ultra Member #5 Jul 27, 2012, 05:01 PM
Post crossover happens some time so you have the information you need to complete the first question you asked

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