B is corrent. The weighted-average shares outstanding is needed for the basic earnings per share computation. The weighted-average is calculated by multiplying the number of shares issued by the fraction of a year during which the stock was outstanding. The weighted-average number of shares from the May issuance is [3,000 × (8/12)], or 2,000 shares. The total number of shares is 47,000 shares (45,000 + 2,000).
A is incorrect. The weighted-average shares outstanding is needed for the basic earnings per share computation. The weighted-average is calculated by multiplying the number of shares issued by the fraction of a year during which the stock was outstanding. The weighted-average number of shares from the May issuance is [3,000 × (8/12)], or 2,000 shares. The total number of shares is 47,000 shares (45,000 + 2,000).
C is incorrect. The weighted-average shares outstanding is needed for the basic earnings per share computation. The weighted-average is calculated by multiplying the number of shares issued by the fraction of a year during which the stock was outstanding. The weighted-average number of shares from the May issuance is [3,000 × (8/12)], or 2,000 shares. The total number of shares is 47,000 shares (45,000 + 2,000).
D is incorrect. The weighted-average shares outstanding is needed for the basic earnings per share computation. The weighted-average is calculated by multiplying the number of shares issued by the fraction of a year during which the stock was outstanding. The weighted-average number of shares from the May issuance is [3,000 × (8/12)], or 2,000 shares. The total number of shares is 47,000 shares (45,000 + 2,000).
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