INTERMEDIATE ACCOUNTING /TX /LL/ CONNEC
10th Edition
ISBN: 9781264034420
Author: SPICELAND
Publisher: MCG
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Hogwarts Inc. (HI) had 80,000 ordinary shares outstanding on January 1, 2025. Transactions throughout 2025 affecting its shareholdings follow.
February 1: HI issued 200,000, $10, cumulative 10% preferred shares.
March 1: HI issued 40,000 ordinary shares.
April l: HI declared and issued an 8% stock dividend on the ordinary shares.
July 1: HI repurchased and cancelled 30,000 ordinary shares.
October 1: HI declared and issued a 3-for-l stock split on the ordinary shares.
December 31: HI declared $99,600 in dividends on the ordinary shares.
Net income for the year ended December 31, 2025, was $600,000. Its tax rate was 40%.
Required
What was the weighted average number of ordinary shares outstanding in 2025?
What was the basic EPS in 2025?
If the preferred shares issued on February 1, 2025, were non-cumulative, what would basic EPS for 2025 have been?
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