On December 31, 2020, Nettle Corporation had 5,000, $2 preferred shares and 80,000 common shares issued. During 2021, 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 profi t in 2021 was $520,000.

Instructions

a. Calculate the weighted average number of common shares for 2021.

b. Calculate earnings per share under each of the following independent assumptions:

1. Preferred shares are cumulative and dividends were

i. declared.

ii. not declared.

2. Preferred shares are noncumulative and dividends were

i. declared.

ii. not declared.