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20 June, 13:39

Tomba Corporation had 300,000 shares of common stock outstanding on January 1, 2017. On May 1, Tomba issued 30,000 shares. (a) Compute the weighted-average number of shares outstanding if the 30,000 shares were issued for cash.

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  1. 20 June, 14:51
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    320,000

    Explanation:

    Given that,

    Common stock outstanding on January 1, 2017 = 300,000 shares

    On May 1, shares issued = 30,000

    Weighted average shares:

    = [300,000 * (12 : 12) ] + [30,000 * (8 : 12) ]

    = 300,000 + 20,000

    = 320,000

    Therefore, the weighted-average number of shares outstanding is 320,000 if the 30,000 shares were issued for cash.

    Note:

    As they issued stock dividend additional shares assumed to be outstanding from the very beginning of the year.
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