Ask Experts Questions for FREE Help !
Ask
    Rarequeen's Avatar
    Rarequeen Posts: 25, Reputation: 2
    New Member
     
    #1

    Oct 21, 2007, 07:19 AM
    Outstanding shares
    Can someone look at this ant tell me what I am doing wrong please.

    The annual income statements for Cortez, Inc. as reported when they were initially published in 2003, 2004, and 2005 follow: Earnings per share calculation and presentation
    2003 2004 2005
    Net sales.. . . $370,000 425000 412500
    Operating expenses.. . 232,500 260,000 245,500
    Income from continuing operations. . 137,500 165,000 167,000
    Loss on discontinued segment.. . (52,500)
    Income before extraordinary items.. . 85,000 165,000 167,000
    Extraordinary gain (loss).. . 33,000 (70,000)
    Net income.. . $ 85,000 $198,000 $ 97,000
    The company also experienced changes in the number of outstanding shares from the following events:
    Outstanding shares on December 31, 2002.. . 40,000
    2003
    Treasury stock purchase on April 1.. . - 4,000
    Issuance of new shares on June 30.. . + 12,000
    10% stock dividend on October 1.. . + 4,800
    Outstanding shares on December 31, 2003.. . 52,800
    2004
    Issuance of new shares on July 1.. . + 16,000
    Treasury stock purchase on November 1.. . - 4,800
    Outstanding shares on December 31, 2004.. . 64,000
    2005
    Issuance of new shares on August 1.. . + 20,000
    Treasury stock purchase on September 1.. . - 4,000
    3-for-1 stock split on October 1.. . +160,000
    Outstanding shares on December 31, 2005.. . 240,000

    1. Compute the weighted average of the common shares outstanding for year 2003.
    2. Compute the EPS component amounts to report with the year 2003 income statement for: income from continuing operations, the loss on discontinued segment, and net income.
    3. Compute the weighted average of the common shares outstanding for year 2004.
    4. Compute the EPS component amounts to report with the year 2004 income statement for: income from continuing operations, the extraordinary gain, and net income.
    5. Compute the weighted average of the common shares outstanding for year 2005.
    6. Compute the EPS component amounts to report with the year 2005 income statement for: income from continuing operations, the extraordinary loss, and net income.
    Analysis Component
    7. Explain how you would use the EPS data from part 6 to predict EPS for 2006
    Rarequeen's Avatar
    Rarequeen Posts: 25, Reputation: 2
    New Member
     
    #2

    Oct 21, 2007, 03:39 PM
    I have a question in getting the weight average you the qustanding shares and divide by the fraction of year right or do you multiply the outstanding shares for 2003 was 52800 so you take the 52800 and add the shares for January -july you ge 68800 do I divide that by 6/12 which is .5 or do I multiply to get the weight average

    Part 2. Year 2003 earnings per share components:

    Reported Divided by Earnings
    Total Shares per Share
    Income from continuing
    Operations $137,500 47,300 $2.91
    Loss on discontinued
    Segment (52,500) 47,300 $(1.11)
    Net income $85,000 47,300 $1.80

    Part 3. Year 2004 weighted-average shares:

    Outstanding Fraction Weighted
    Time Period Shares of Year Average
    January-June 68,800 6/12 137,600
    July-October 48,000 4/12
    November-December 43,200 2/12
    Weighted-average shares outstanding 60,000

Not your question? Ask your question View similar questions

 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Outstanding shares [ 2 Answers ]

How do I find the outstanding shares, effect of dividend, fraction of a year, andweighted average? Year 2003 Outstanding shares December 31, 2oo2 40,000 Outstanding shares on dec 31, 2003 52,800 Outstanding shares on dec 31 2004 64,000 Outstanding shares on...

Outstanding charges [ 1 Answers ]

Upon aqcuiring a criminal record check a few years ago, I found an outstanding charge for Theft under 200.00, from Alberta Canada. The date of the charge was June 1999. Not that it matters but I had a falling out with my roommate at the time and moved out, and all the way back to Ontario. During...

Mortgage outstanding balance [ 3 Answers ]

Hi, Does somebody knows how to find out outstanding balance of mortgage after couple of months or years? I would like to see how my capital is going down month after month or years. Mortgage timetable repayment. I do not have a mortgage jet but I would like to see how it is working in real and...

Shares applied for and shares alloted [ 2 Answers ]

I am a bit confused - the following is a question in my assignment: Xx Ltd was registered on 1 Jan with a capital of R80 000, divided into 10 000 5% preff shares @ R2.00 each, and 30 000 ordinary shares of R2.00 each. Preff shares were fully subscribed and duly allotted, but only 25 000 ordinary...


View more questions Search