ael719 wrote: Another way of calculating it where the retroactive application of the stock dividend is easier to see than from my previous calculation. http://spreadsheets.google.com/ccc?key=0Atfxefm9DKu4dE85a2Q2 QnlRRmZJc05oeUl3WEdxYWc&hl=en I pick 47,300 How are you getting 47,800 cpaguy?

(40,000 + 4800*) x 12/12 = 44,800

-4000 x 9/12 = -3000

12000 x 6/12 = 6000

44,800 - 3000 + 6000 = 47,800

* The 10% stock dividend are treated as outstanding for the whole year; therefore 12/12 fraction is used.

ael very nice work on the chart! i see that you applied the stock dividend retroactively to each transaction. This is how I did it

........# shares..........period.......weighted avg.

1/1...40000 + 4800....x 3/12......=11,200

4/1...40800..............x 3/12......=10,200

6/30..52,800............x 6/12.......=26,400

tot..........................................47,800

So you see I applied the stock dividend retroactively, but I only adjusted the beginning # of shares. Technically we both applied the dividend retrospectively, but we have two different answers... 

Thank you cpaguy, although my way is slightly different we land at the same answer, but is that be the right one?

yes, that is also how i read the numerator. Another great thing is that if done correctly all the fractions must equals 12/12 when added. So that sort of keeps me in check. thank you again, everyone.