During 2016, Sanchez, Inc. had the following convertible securities outstanding:

1. $220,000 of 10%, $100 par, cumulative preferred stock. Each share is convertible into 5 shares of common stock.
2. $200,000 of 9.5% convertible bonds. Each $1,000 bond is convertible into 45 shares of common stock.
3. $100,000 of 8% convertible bonds. Each $1,000 bond is convertible into 32 shares of common stock.
4. $150,000 of 11%, $100 par, cumulative preferred stock. Each share is convertible into 5 shares of common stock.

Sanchez, Inc. has an income tax rate of 40%.

Required:

1. Prepare a schedule that lists the impact of the assumed conversion of each convertible security on diluted earnings per share.
2. Prepare a ranking of the order in which the securities would be included in the diluted earnings per share calculations.

Please do not copy from Chegg otherwise I have to report the answer. Explain the answer throughly by showing each step of the calculation.