文档介绍：14 Earnings Per Share And Retained Earnings
Accounting School · Zhongnan University of Economics & Law
ntermediate Accounting
I
中级会计学
1. Basic Earnings Per Share
Net e – Preferred Dividends
Weighted Average Number mon Shares Outstanding
Intermediate Accounting 14 Earnings Per Share And Retained Earnings
Weighted Average Shares
Since a corporation earns e over the entire year, the earnings are related to mon shares outstanding during the year.
Intermediate Accounting 14 Earnings Per Share And Retained Earnings
A corporation had 12,000 shares mon stock outstanding at the beginning of the year. On March 2, it issued 2,700 shares; on July 3, it issued another 3,300 shares, and on December 1, it reacquired 480 shares as treasury stock.
Months Shares Shares Fraction of Year Equivalent
Are Outstanding Outstanding Outstanding Whole Units
x
=
January-February 12,000 x 2/12 = 2,000
March-June 14,700 x 4/12 = 4,900
July-November 18,000 x 5/12 = 7,500
December 17,520 x 1/12 = 1,460
15,860
Total weighted mon shares
The nearest whole month is used
Intermediate Accounting 14 Earnings Per Share And Retained Earnings
Weighted Average Shares
A corporation begins operations in January 2004, and issues 5,000 shares mon stock that are outstanding all during 2004. On December 31, 2004, it issues a 2-for-1 stock split.
Months Shares Shares Fraction of Year Equivalent
Are Outstanding Outstanding Outstanding Whole Units
x
=
January-December 5,000 x 12/12 = 5,000
Total weighted mon shares 10,000
The two-for-one split is retroactive to January 1 + 5,000
Intermediate Accounting 14 Earnings Per Share And Retained Earnings
Weighted Average Shares
On May 28, 2005, the corporation issues 5,000 shares mon stock; on August 3, it issues a 20% stock dividend; and on October 5, it issues 2,005 shares of stock.
Months Shares Shares Fraction of Year Equivalent
Are Outstanding Outstanding Outstanding Whole Units
x
=
January-December 5,000 x 12/12 = 5,000
2004 Data