Those who need some extra questions to look over..... following, something, posting, question, solution

simeezee

I hope you CFA candidate’s aren’t annoyed by my posting yet….i need to get my AF points up to get myself one of those Schweser “Study now, Sleep Later” T-shirts….so bear with me please.
Anyways, I posted the solution to this question. It’s fairly a simple question, however, I’ve been hammering the qbank all day today, maybe my brain is fried up or something but I can’t figure out how on earth they got 70,000 for year 2004 in the solution.
Zimmer Co. had the following common shares outstanding:
January 1, 2003: 50,000
October 1, 2003: Issued 20,000 shares
March 1, 2004: Issued a 10% stock dividend
July 1, 2004: Declared a 2 for 1 stock split
October 1, 2004: Repurchased 30,000 shares
Calculate the weighted average number of common shares outstanding for 2003 and 2004.
2003 2004
A) 55,000 124,500


B) 10,000 124,000


C) 55,000 146,500


Your answer: A was incorrect. The correct answer was C) 55,000 146,500
For year 2003:
50,000

cyber21

I don’t think the question bank has got the right answer to this.  The second year should be starting with 55,000 not 70,000.

redskins44

Dude - 2nd year should start with 70,000 only. As in first year we take prorata of 20,000. But in 2nd year complete 20,000 shares were aailable

jarobi04

thanks, that makes a lot of sense to me now!