3 of 4 < > View Policies Current Attempt in Progress An excerpt from the statement of financial position of Crane Limited follows: CRANE LIMITED Selected Statement of Financial Position Information At December 31, 2020 Long-term debt Notes payable, 10% 4% convertible bonds payable 6% convertible bonds payable Total long-term debt Shareholders' equity $0.66 cumulative, no par value, convertible preferred shares $5,122,000 2.163,000 2,892,000 $10,177,000 (unlimited number of shares authorized, 571,500 shares issued and outstanding) $2,857,500 Common shares, no par value (7,499,400 shares authorized, 2,752,100 shares issued and outstanding) 25,766,000 Contributed surplus 218,200 6,741,400 Retained earnings Total shareholders' equity $35,583,100 - / 21 == Question 3 of 4 < > Notes and Assumptions December 31, 2020 -/21 !!! 1. Options were granted/written in 2019 that give the holder the right to purchase 99,400 common shares at $8 per share. The average market price of the company's common shares during 2020 was $14 per share. The options expire in 2028 and no options were exercised in 2020. 2. 3. The 4% bonds were issued in 2019 at face value. The 6% bonds were issued on June 1, 2020, at face value. Each bond has a face value of $1,000 and is convertible into 100 common shares. The convertible preferred shares were issued at the beginning of 2020. Each share of preferred is convertible into one common share. 4. The average income tax rate is 25%. 5. The common shares were outstanding during the entire year. 6. Preferred dividends were not declared in 2020. 7. Net income was $2,255,500 in 2020. 8. No bonds or preferred shares were converted during 2020. Calculate the income effect of the dividends on preferred shares. Dividends on preferred shares eTextbook and Media $ Calculate basic earnings per share for 2020. (Round answer to 2 decimal places, e.g. 15.25.) Basic EPS $ eTextbook and Media Determine an incremental per share effect for $0.66 preferred shares. (Round answer to 2 decimal places, e.g. 15.25.) Potentially dilutive security $0.66 Preferred shares eTextbook and Media $ Incremental Numerator Effect Incremental Denominator Effect $ EPS Calculate the proceeds from assumed exercise of 99,400 options. $ Proceeds from exercise of options Calculate the incremental shares oustanding upon the exercise of options. The incremental shares oustanding upon the exercise of options eTextbook and Media Calculate the after-tax interest paid on the 4% bonds. After-tax interest on 4% bonds converted eTextbook and Media $ Determine an incremental per share effect for 4% bonds. (Round earnings per share to 2 decimal places, e.g. 15.25.) Potentially dilutive security 4% Bonds eTextbook and Media $ Incremental Numerator Effect Calculate the after-tax interest paid on the 6% bonds. After-tax interest on 6% bonds converted eTextbook and Media Incremental Denominator Effect EPS Determine an incremental per share effect for 6% bonds. (Round earnings per share to 2 decimal places, e.g. 15.25.) Incremental Potentially dilutive security Numerator Effect 6% Bonds eTextbook and Media Incremental Denominator Effect EPS Rank the potentially dilutive securities from most dilutive to least dilutive. 4% Bonds 6% Bonds $0.66 Preferred shares Options eTextbook and Media Calculate diluted earnings per share for 2020. (Round earnings per share to 2 decimal places, e.g. 15.25.) Basic Sub Total Sub Total Sub Total Diluted EPS eTextbook and Media Numerator Denominator $ EPS