E16-15b (weighted-average number of shares) keynote inc. uses a

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E16-15B (Weighted-Average Number of Shares) Keynote Inc. uses a calendar year for financial reporting.

The company is authorized to issue 20,000,000 shares of $1 par common stock. At no time has Keynote issued any potentially dilutive securities. Listed below is a summary of Keynote’s common stock activities.

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1. Number of common shares issued and outstanding at December 31, 2012 and 2011 5,000,000

2. Shares issued for cash on March 31, 2013 1,000,000

3. A 2-for-1 stock split of Keynote’s common stock took place on August 31, 2013.

4. Shares issued as a result of a 30% stock dividend on June 30, 2014 3,600,000

Instructions

(a) Compute the weighted-average number of common shares used in computing earnings per common share for 2012 on the 2013 comparative income statement.

(b) Compute the weighted-average number of common shares used in computing earnings per common share for 2013 on the 2013 comparative income statement.

(c) Compute the weighted-average number of common shares to be used in computing earnings per common share for 2013 on the 2014 comparative income statement.

(d) Compute the weighted-average number of common shares to be used in computing earnings per common share for 2014 on the 2014 comparative income statement.