Morrison Corporation had the following common stock record during the current calendar year:

What is the number of shares to be used in computing basic EPS?
A)2,000,000.
B)2,205,000.
C)2,307,500.
D)2,335,000.

Question

Morrison Corporation had the following common stock record during the current calendar year:

What is the number of shares to be used in computing basic EPS?
A)2,000,000. 
B)2,205,000. 
C)2,307,500. 
D)2,335,000.

Quizplus · Accepted Answer

Basic EPS is calculated using the weighted average number of common shares outstanding during the period. In this case, we need to add the beginning balances (2,000,000) to the shares sold during the period (205,000) to obtain the weighted average number of common shares outstanding, which is 2,205,000. Therefore, the correct answer is B.

Morrison Corporation Had the Following Common Stock Record During the Current