Blue Bay Logistics Ltd.'s shareholders' equity accounts were as follows at the beginning of the current fiscal year, April 1, 2014:

$5 cumulative preferred shares (20,000 shares issued) .......................$1,950,000

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

Retained earnings .................................................................. 1,500,000

Total shareholders' equity ........................................................$7,200,000

During the year, the following selected transactions occurred:

June 1 Issued 2,000 common shares for $12 per share.

July 1 Issued 50,000 common shares for $13 per share.

Feb. 28 Declared the annual preferred cash dividend to shareholders of record on March 12, payable on April 1.

Mar. 31 Profit for the year ended March 31, 2015, was $1,016,750.

Instructions

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

(b) Calculate the earnings per share.

(c) Why is it important to use profit available to common shareholders in the calculation of earnings per share? Why not just use profit?

(d) Would your answer to part (b) change if the preferred share dividend had not been declared on February 28? Explain.