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Topic: Earning per share-WACSO calculation (

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gottobecpa
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Joined: 10 Feb 2010
Location: United States
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Posts: 262

Posted: 04 May 2010 at 14:49 \| IP Logged

treasury stocks are sold, they r not purchased, you subtract when you purchase them

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Alex2008
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Joined: 31 Aug 2009
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Posted: 04 May 2010 at 17:19 \| IP Logged

When the problem express that Treasury Stocks was sold it means that the company had bought the Treasury Stocks previously and now (in April 1, 1990) the company is selling the stocks again to the market.

The EPS is calculated with the outstanding stocks. The Treasury Stocks that the company have do not affect EPS.

How does a stock split affect future sales of Treasury Stock? In the above problem, what would happen if the Stock Split was in April and then the company sold Treasury Stock in July?

I think Stock Splits does not affect neither Treasury Stocks on hand nor future sales of Treasury Stocks. If the 20,000 Treasury Stocks were sold in July there is not need to make an adjustment for EPS. It is like selling new stocks and the adjustments would be to cancel Treasury Stocks and Additional Paid in Capital Treasury Stocks.

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