[Hangry]

X Co. had the following stock transactions during the fiscal year ended June 30, Year 2:

Beginning stock balance, July 1, Year 1 100,000 shares

2:1 stock split, September 30, Year 1

Issuance of additional shares, January 1, Year 2 50,000 shares

Repurchase of shares, June 23, Year 2 1,040 shares

What was X Co.’s weighted average number of shares outstanding at June 30, Year 2?

Beginning balance

100,000 x 12/12 =100,000

Stock split

100,000 x 12/12 =100,000

Sale of shares

50,000 x 6/12 =25,000

Repurchase

1,040 x 1/52 = (20)

Total

224,980

I thought that the stock split would be handled retrospectively since it occurred on Sept. 30.

(3/12) * 200000?????

Could someone please help me understand?

FAR: 49, 64

[Anonymous]

Stock splits and stock dividends are handled as if they happened from the very beginning, so they are valued at 12/12.

[thehip41]

I think that last number should not be 1/52

Its 8 days with the new number 23rd-30th.

Should be 8/365 not 1/52 or whatever it is.

also 1/52 does not equal 1 weeks

Other than that it looks good.

FAR - 83
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REG - 88

Licensed CPA in the state of Michigan

[Author]

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