The shareholders’ equity accounts of Gualtieri Inc. on August 1, 2023, the beginning of its fiscal year, are as follows: 

$4 noncumulative preferred shares (25,000 issued) .............................$1,250,000 

Common shares (350,000 issued) .............................................................3,750,000 

Retained earnings ........................................................................................2,250,000 

Total shareholders’ equity ..........................................................................$7,250,000 

During the year, the following transactions occurred: 

Nov. 30 Issued 37,500 common shares for $12 per share. 

Feb. 1 Reacquired 6,000 common shares for $10 per share. 

Mar. 1 Issued 30,000 common shares in exchange for equipment. The equipment’s fair value was $40,000. 

July 31 Profit for the year ended July 31, 2024, was $1,022,800

Instructions 

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

b. Calculate the earnings per share if no preferred share dividends are declared during the year. 

c. Calculate the earnings per share if the company declares a preferred share dividend of $60,000. 

d. What are the total common shares issued on July 31, 2024? 

Why is it important to use a weighted average number of shares in the earnings per share calculations? Why not just use the average number of shares during the year?