Carla Corporation had a net income for the current year ending December 31, 2021 of $1,229,500. Throughout 2021 the following items were outstanding:

		406,000 common shares
		22,000 Class A $3 cumulative preferred shares that were convertible to common shares at a rate of 1:1
		49,000 Class B $4 non-cumulative preferred shares that were convertible at a rate of one common share for every two preferred shares.
		$511,500, 8% bonds that were convertible to 15,500 common shares
		$311,000, 10% bonds convertible to 10,000 common shares

No dividends were declared or paid in 2021. Carlas tax rate is 25%.

1. Calculate the income effect of the dividends on Class B preferred shares. Dividends on Class B preferred shares =

2. Calculate basic earnings per share. (For simplicity, ignore the requirement to record the debt and equity portions of the convertible bond separately)

Basic earnings per share =

3. Determine an incremental per share effect for Class B preferred shares.

Potentially dilutive security		Incremental Numerator Effect		Incremental Denominator Effect		EPS
Class B Preferred shares		$				$