The question is listed below. Could someone please explain how the shares purchased on 4/1/2001 are for 8 months instead of 9 months? (April to December is 9 months) Sugarland Corporation had 200,000 common shares outstanding at January 1, 2000. They issued 30,000 additional shares on 4/1/2001 and 12,000 shares on 12/1/2001. What is the weighted average number of shares for the basic EPS computation at the end of the year 2001? A. 200,000 shares B. 222,500 shares C. 223,500 shares D. 242,000 shares Correct Answer: C. The computation is (200,000 x 3/12) + (230,000 x 8/12) + (242,000 x 1/12) = 223,500 shares.
Dec 1st is like Nov 30.
you’re correct probably a typo (april 31?)
200,000*12/12=200,000 30,000*9/12=22,500 12,000*1/12=1,000 sums up to 223,500. I don’t see whats wrong?
by that I mean the question comes out right, the computation on the bottom is where the typo is.
Thanks for the explanations. This question is a review question and the answer shows 8/12 for April 1st. When I tried to calculate it, the answer didn’t match.