The shareholders’ equity accounts of Blue Bay Logistics Ltd. on April 1, 2023, the beginning of the fiscal year, are as follows: 

$6 cumulative preferred shares (20,000 issued) ...................................$1,800,000 

Common shares (500,000 issued) ............................................................  3,750,000 

Retained earnings ........................................................................................ 1,550,000 

Total shareholders’ equity ..........................................................................$7,100,000

During the year, the following transactions occurred: 

2023 

June 1 Reacquired 12,000 common shares for $9 per share. 

July 1 Issued 50,000 common shares for $10 per share. 

Sept. 30 Reacquired 8,000 common shares for $9.50 per share. 

2024 

Jan. 31 Issued 60,000 common shares in exchange for land. The land’s fair value was $600,000. 

Mar. 31 Profit for the year ended March 31, 2024, was $973,600.

Instructions 

a. Calculate the weighted average number of common shares for the year. 

b. Assuming the preferred share dividends are one year in arrears, calculate the earnings per share if no preferred dividends are declared during the year. 

c. What is the total number of common shares issued on March 31, 2024?

Why is earnings per share an important measure for common shareholders but not for preferred shareholders?