Question

On December 31, 2015, Beta Company had 340,000 shares of common stock issued and outstanding. Beta issued a 6% stock dividend on June 30, 2016. On September 30, 2016, 29,000 shares of common stock were reacquired as treasury stock. What is the appropriate number of shares to be used in the basic earnings per share computation for 2016?a. 353,150.b. 391,140.c. 367,650.d. 360,400.

Answer 1

A. 353,150

Step-by-step explanation:

To get The appropriate number of shares to be used in the basic earnings per share for 2016,

You subtract the stock that was acquired in September from the Beta company shares.

Thus

(340,000*1.06) - (29,000*3/12) = 353,150.

353,150 is the number of shares to be used for computing September 2016 shares.