Newton Inc. uses a calendar year for financial reporting. The company is authorized to issue 9,000,000 shares of $10 par common stock. At no time has Newton issued any potentially dilutive securities. Listed below is a summary of Newton's common stock activities. 1. 1Number of common shares issued and outstanding at December 31, 2018 2,000,000 2. 1Shares issued as a result of a 10% stock dividend on September 30, 2019 200,000 3. 1Shares issued for cash on March 31, 2020 2,000,000      1Number of common shares issued and outstanding at December 31, 2020 4,200,000 4. 1A 2-for-1 stock split of Newton's common stock took place on March 31, 2021   Instructions a.   Compute the weighted-average number of common shares used in computing earnings per common share for 2019 on the 2020 comparative income statement. b.   Compute the weighted-average number of common shares used in computing earnings per common share for 2020 on the 2020 comparative income statement. c.   Compute the weighted-average number of common shares to be used in computing earnings per common share for 2020 on the 2021 comparative income statement. d.   Compute the weighted-average number of common shares to be used in computing earnings per common share for 2021 on the 2021 comparative income statement.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Newton Inc. uses a calendar year for financial reporting. The company is authorized to issue 9,000,000 shares of $10 par common stock. At no time has Newton issued any potentially dilutive securities. Listed below is a summary of Newton's common stock activities.

1. 1Number of common shares issued and outstanding at December 31, 2018
2,000,000
2. 1Shares issued as a result of a 10% stock dividend on September 30, 2019
200,000
3. 1Shares issued for cash on March 31, 2020
2,000,000
     1Number of common shares issued and outstanding at December 31, 2020
4,200,000
4. 1A 2-for-1 stock split of Newton's common stock took place on March 31, 2021
 

Instructions

a.   Compute the weighted-average number of common shares used in computing earnings per common share for 2019 on the 2020 comparative income statement.

b.   Compute the weighted-average number of common shares used in computing earnings per common share for 2020 on the 2020 comparative income statement.

c.   Compute the weighted-average number of common shares to be used in computing earnings per common share for 2020 on the 2021 comparative income statement.

d.   Compute the weighted-average number of common shares to be used in computing earnings per common share for 2021 on the 2021 comparative income statement.

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