000.EXPLANATIONTHE JANUARY 1 BALANCE IS ADJUSTED RETROACTIVELY FOR...

930, - UNDERSTANDING INCOME STATEMENTS 1
UNDERSTANDING INCOME STATEMENTS 1
930,000.ExplanationThe January 1 balance is adjusted retroactively for the stock dividend and (540,000 × 1.5) = 810,000 shares are treated asoutstanding from January 1. The weighted average number of shares is computed by multiplying the shares by the number ofmonths held, as follows:January 1 Initial shares (810,000 × 12) = 9,720,000July 1 Reacquired shares (-180,000 × 6) = 1,080,000October 1 Reissued shares (60,000 × 3) = 180,000