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30 May, 09:58

Robinson Company had 1 million shares outstanding at the beginning of the year. On April 1, Robinson issued an additional 300,000 shares. On July 1, Robinsonissued 200,000 more shares. What is Robinson's weighted average number of shares outstanding for the calculation of earnings per share

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  1. 30 May, 11:32
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    Weighted shares = 1,325,000

    Explanation:

    The shares issued by Robinson Company are wieghted below

    From last year 1 million shares were issued so they have full weight.

    As at April this year 300,000 shares were issued. There are 9 months remaining in the year of 12 months, so weight is (9/12) * 300,000

    At July 200,000 shares are issued with outstanding 6 months in the year of 12 months. Weight is (6/12) * 200,000

    To get total weighted shares add all weights for issued shares.

    Weighted shares = 1,000,000 + (9/12) * 300,00 + (6/12) * 200,000

    Weighted shares = 1,000,000 + 225,000 + 100,000

    Weighted shares = 1,325,000
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