Normally the weighted average number of common shares outstanding is calculated according to the order of events if there is activity that occurred before the stock split. So in this problem, the reissuance of treasury stock on Apr. 1 is calculated and weighted at 15,000 shares and added to the beginning number of 100,000 shares, chronologically, on Jul. 1 when the stock split took place, the 115,000 shares is doubled to 230,000 shares.

Preferred stock dividend should be deducted from net income for both basic and diluated EPS calculations, unless it is a convertible preferred stock, in that case the dividend is added back for diluted EPS calucation. For cumulative convertible preferred stocks, dividends need to be deducted even if they have not been declared.