Hello everyone, i just want to find out what would be the right way to calculate the weighted average of c/s shares for they year given the following:

Outstanding shares on December 31, 2002 . . . . . . . 40,000

2003
Treasury stock purchase on April 1 . . . . . . . . . . . . . - 4,000
Issuance of new shares on June 30 . . . . . . . . . . . . . . + 12,000
10% stock dividend on October 1 . . . . . . . . . . . . . . + 4,800
Outstanding shares on December 31, 2003 . . . . . . . 52,800

I first came up with 44,200 shares; then realized stock dividends are applied as of the beginning of the year and that changed my answer to 47,800 shares...

Stock dividends and stock splits always throw me off, but that's also because i don't practice this area as much. i tried to google problems involving the calculation of wacso, but only come accross sites that offer you problems but charge you $2.19 for the solution.

I have also tried my old texts, but i never know whether im right or wrong since there are no solutions provided at the back of the book...

When in doubt i post here, but i can never copy and paste because the format changes and doing it over becomes very time consuming, on the other hand i really like that no matter how big or small the questions are there's always someone willing to help ... 

thank you in advance for shedding some light on this one :) 

I'll have to double-check in my book but I believe the point of this question is to understand that stock dividends are treated as if they happened at the beginning of the period.

So, you issue a 10% stock dividend on 10/1 but you should treat it like it happened on 1/1 so I believe the answer is 52,800 since that is the number after the 10% dividend.

Since it is retroactive on 10/1 it is the balance for all 12 months in the calculation. Again, could be wrong, when I get home I will check out the book.

54. If the number of common shares outstanding increases as a result of a stock dividend or stock split 24 or decreases as a result of a reverse stock split, the computations of basic and diluted EPS shall be adjusted retroactively for all periods presented to reflect that change in capital structure. If changes in common stock resulting from stock dividends, stock splits, or reverse stock splits occur after the close of the period but before issuance of the financial statements, the per-share computations for those and any prior-period financial statements presented shall be based on the new number of shares. If per-share computations reflect such changes in the number of shares, that fact shall be disclosed."