ACCT 304 Chapter 16 QUIZ

ACCT 304 Chapter 16 QUIZ
E16 16 EPS Simple Capital Structure On January 1 2012 Chang Corp had 480000 shares of common
stock outstanding. During 2012, it had the following transactions that affected the Common Stock account.

February 1 Issued 120,000 shares
March 1 Issued a 20% stock dividend
May 1 Acquired 100,000 shares of treasury stock
June 1 Issued a 3-for-1 stock split
October 1 Reissued 60,000 shares of treasury stock

Instructions
(a) Determine the weighted-average number of shares outstanding as of December 31, 2012.
(b) Assume that Chang Corp. earned net income of $3,256,000 during 2012. In addition, it had 100,000
shares of 9%, $100 par nonconvertible, noncumulative preferred stock outstanding for the entire
year. Because of liquidity considerations, however, the company did not declare and pay a preferred
dividend in 2012. Compute earnings per share for 2012, using the weighted-average number of
shares determined in part (a).
(c) Assume the same facts as in part (b), except that the preferred stock was cumulative. Compute earnings
per share for 2012.
(d) Assume the same facts as in part (b), except that net income included an extraordinary gain of
$864,000 and a loss from discontinued operations of $432,000. Both items are net of applicable
income taxes. Compute earnings per share for 2012.