Blossom Corporation is preparing earnings per share data for 2020. The net income for the year ended December 31, 2020 was $ 390,000 and there were 58,000 common shares outstanding during the entire year. Blossom has the following two convertible securities outstanding: $ 100,000 10% convertible bonds (each $1,000 bond is convertible into 20 common shares) 3% convertible $ 100 par value preferred shares (each share is convertible into 2 common shares) $ 45,000 Both convertible securities were issued at face value in 2017. There were no conversions during 2020, and Blossom's income tax rate is 21%. The preferred shares are cumulative. For simplicity, ignore the requirement to record the debt and equity components of the bonds separately. Your answer is incorrect. Calculate the income effect of the dividends on preferred shares. Dividends on preferred shares Calculate Blossom's basic earnings per share for 2020. (Round answer to 2 decimal places, eg. 15.25.) Basic earnings per share e Textbook and Media X Your answer is incorrect. Calculate the after-tax interest paid on the 10% bonds, After-tax interest Determine an incremental per share effect for each potentially dilutive security. (Round earnings per share to 2 decimal places, e.g. 15.25.) Potentially dilutive security Incremental Numerator Effect Incremental Denominator Effect EPS Bonds 10% $ $ e Textbook and Media Determine an incremental per share effect for each potentially dilutive security. (Round earnings per share to 2 decimal places, eg. 15.25.) Potentially dilutive security Incremental Numerator Effect Incremental Denominator Effect EPS 3% Preferred shares $ e Textbook and Media Rank the potentially dilutive securities from most dilutive to least dilutive. Rank 1 Rank 2 e Textbook and Media Calculate Blossoms diluted earnings per share for 2020. (Round earnings per share to 2 decimal places, eg. 15.25.) Numerator Denominator EPS Basic $ DODEN Sub Total $ $ Recalculate Blossom's basic and diluted earnings per share for 2020, assuming instead that the preferred shares pay a 14% dividend. Calculate the income effect of the dividends on preferred shares. $ Dividends on preferred shares e Textbook and Media x Your answer is incorrect. Calculate Blossom's basic earnings per share for 2020. (Round answer to 2 decimal places, eg. 15.25.) Basic earnings per share Determine an incremental per share effect for the 14% preferred shares. (Round earnings per share to 2 decimal places, eg. 15.25.) Potentially dilutive security Incremental Numerator Effect Incremental Denominator Effect EPS 14% Preferred shares $ $ The 14% shares are Calculate Blossom's dilutive earnings per share for 2020. (Round answer to 2 decimal places, eg. 15.25.) Diluted earnings per share $
