An excerpt from the statement of financial position of Carla Vista Limited follows. CARLA VISTA LIMITED Selected Statement of Financial Position Information At December 31, 2020 Long-term debt Notes payable. 1096 $4.765,000 4% convertible bonds payable 2,187,000 6% convertible bonds payable 2.736,000 Total long-term debt $9,688.000 $3,244,000 Shareholders' equity 50.72 cumulative, no par value, convertible preferred shares (unlimited number of shares authorized, 648,800 shares issued and outstanding) Common shares, no par value (8.447.600 shares authorized. 2.758.500 shares issued and outstanding) Contributed surplus Retained earnings Total shareholders' equity 24,236,000 193,300 7,00 1.900 $34.675.200 Notes and Assumptions December 31, 2020 1 2 Options were granted written in 2019 that give the holder the right to purchase 96,600 common shares at $8 per share The average market price of the companys common shares during 2020 was $14 per share. The options expire in 2028 and no options were exercised in 2020 The 496 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 The average Income tax rate is 2556 The common shares were outstanding during the entire year. Preferred dividends were not declared in 2020 3. 4 5. 6. Calculate the income effect of the dividends on preferred shares. $ Dividends on preferred shares Calculate basic earnings per share for 2020. (Round answer to 2 decimal places, 03. 15.25.) Basic EPS $ Determine an incremental per share effect for 50.72 preferred shares. (Round answer to 2 decimal places, eg. 15.25) Potentially dilutive security 50.72 Preferred shares Incremental Numerator Effect Incremental Denominator Effect EPS $ Calculate the proceeds from assumed exercise of 96,600 options S Proceeds from exercise of options Calculate the incremental shares oustanding upon the exercise of options. The incremental shares oustanding upon the exercise of options Calculate the after-tax interest paid on the 4% bonds. $ After-tax interest on 4% bonds converted Determine an incremental per share effect for 4% bonds. (Round earnings per share to 2 decimal places, es 15.25) Potentially dilutive security Incremental Numerator Effect Incremental Denominator Effect EPS 496 Bonds Calculate the after-tax interest paid on the 6% bonds. $ After-tax interest on 6% bonds converted Determine an incremental per share effect for 6% bonds. (Round earnings per shave to 2 decimal places, eg. 15.25) Potentially dilutive security Incremental Numerator Effect Incremental Denominator Effect EPS $ 6% Bonds Rank the potentially dilutive securities from most dilutive to least dilutive 4% Bonds 696 Bonds Options Options
