Question:

Need some assistance in weighted-average shares & Earnings per share?

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CORTEZ, INC.

Income Statements

2003 2004 2005

Net sales $370,000 $425,000 $412,500

Operating expenses 232,500 260,000 245,500

Income from continuing operations $137,500 $165,000 $167,000

Loss on discontinued segment (52,500) - -

Income before extraordinary items $85,000 $165,000 $167,000

Extraordinary gain (loss) - 33,000 (70,000)

Net income $85,000 $198,000 $97,000

Changes in number of outstanding shares:

Outstanding shares on December 31, 2002 40,000

2003:

Treasury stock purchase on April 1 (4,000)

Issuance of new shares on June 30 12,000

10% stock dividend on October 1 4,800

Outstanding shares on December 31, 2003 52,800

2004:

Issuance of new shares on July 1 16,000

Treasury stock purchase on November 1 (4,800)

Outstanding shares on December 31, 2004 64,000

2005:

Issuance of new shares on August 1 20,000

Treasury stock purchase on September 1 (4,000)

Three-for-one split on October 1 160,000

Outstanding shares on December 31, 2005 240,000

Check figures:

(1) Shares $47,300

(2) EPS 2

(3) Shares 60,000

(4) EPS 3

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1 ANSWERS


  1. I can't get part 6 right, but in any case, I've sent you the file.

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