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sabah109
Newbie
Joined: 26 Jun 2010
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Posts: 45
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| Posted: 13 Aug 2010 at 00:30 | IP Logged
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I know this is probably not hard for alot of you, but I
just can't seem to grasp how to calculate the weighted
average number of shares outstanding.
I am using Becker, and they show two different ways of
doing it. But I still don't get it. This is what I was
thinking:
- Shares issued at the beginning are accounted for full.
_ stock splits are used in full since they too assumed to
be from beginning of period. (but what about a stock
split in the previous year???)
- Any stocks issued in middle of year are pro-rated based
on how many months are left.
Someone please help clarify the formula/calculation
behind weighted-average number of hsares outstanding!!
__________________
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AUD - Nov 13
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CanadianCPA
Major Contributor
Joined: 19 May 2010
Location: United States
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Posts: 554
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| Posted: 13 Aug 2010 at 02:03 | IP Logged
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If they say a stock split occured in the previous year, then you need to adjust so that the beginning balance of the current year takes that into account. Other than that it sounds like you have it under control.
__________________
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ETH - [98]08/17/10
CPA 10/18/11
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jsanders02
Regular
Joined: 16 Apr 2010
Location: United States
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Posts: 215
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| Posted: 13 Aug 2010 at 07:35 | IP Logged
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The stock split in the previous year would not affect this year, unless they give you last year's number of
shares and ask about the effect of the split. But as long as you know the number of shares at the beginning
of this year, then last year's stock split is irrelevant.
Any stock splits in the current year are treated as if they occurred at the beginning of the year, before
any other stock transactions. So if you issue 1,000 shares on January 30, and then had a stock split on
July 1, you would account for the stock split FIRST, so it would then appear you issued 2,000 shares on
January 30.
__________________
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FAR: 93
AUD: 94
REG: 86
All four parts on first try!
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Topic: HELP - EPS!!
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