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Q11BE.

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Intermediate Accounting (Kieso)
Found in: Page 875

Short Answer

Tomba Corporation had 300,000 shares of common stock outstanding on January 1, 2017. On May 1, Tomba issued 30,000 shares. (a) Compute the weighted-average number of shares outstanding if the 30,000 shares were issued for cash. (b) Compute the weighted-average number of shares outstanding if the 30,000 shares were issued in a stock dividend.

a. The weighted-average number of shares outstanding is $320,000.

b. The 30,000 shares issued in the stock dividend are assumed outstanding from the beginning of the year. Therefore, the weighted-average number of shares outstanding is 330,000.

See the step by step solution

Step by Step Solution

Step 1: Computation of the weighted-average number of shares outstanding if the 30,000 shares were issued for cash 

(a).

Step 2: Computation of the weighted-average number of shares outstanding if the 30,000 shares were issued in a stock dividend

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