On December 31, 2016, Nettle Corporation had 5,000, $2 preferred shares and 80,000 common shares issued. During 2017, the company completed the following share transactions:
Apr. 1 Sold 10,000 common shares for $5,000 cash.
Sept. 30 Reacquired 5,000 common shares for $1,800 cash.
Nettle's profit in 2017 was $520,000.
Instructions
(a) Calculate the weighted average number of common shares for 2017.
(b) Calculate earnings per share under each of the following independent assumptions:
1. Preferred shares are cumulative and dividends were
(i) Declared.
(ii) Notdeclared.
2. Preferred shares are noncumulative and dividends were
(i) Declared.
(ii) Notdeclared.