need in 25min

Question 3 (19 marks) Monster Corporation began operations on January 1, 2020. The company reported the following information on its balance sheet as of December 31, 2020: $5,000,000 $12,000,000 Liabilities Convertible bonds payable, $5,000,000, 5%, matures on Dec 31, 2025 (see Note 1 below) Equity Common shares (unlimited authorized, 6,000,000 issued and outstanding) Class A Preferred shares, cumulative $8 annual dividend, convertible to common shares at 4 common shares for each preferred share (100,000 authorized, 20,000 issued and outstanding) Class B Preferred shares, non-cumulative $16 annual dividend, convertible to common shares at 2 common shares for each preferred share (1,000,000 authorized, 25,000 issued and outstanding) Contributed surplus, common stock warrants for the purchase of common shares for $12 per share at any date before Dec 31, 2027 Contributed surplus, bond conversion rights (see Note 1 below) 2,000,000 500,000 300,000 100,000 200,000 Note 1: On January 1, 2020, the company issued $5,000,000 convertible 5% six year bonds, at par. Interest is paid on December 31 each year. Each $1,000 bond can be converted into 50 common shares. Total proceeds of the issuance were $5,100,000. If the company had issued the same bonds without the conversion rights, it would have collected proceeds of $4,900,000. The company uses the incremental method to account for the issuance and the effective interest method to amortize the bond. Note 2: $160,000 in Class A preferred dividends were in arrears as of December 31, 2020. . The following transactions occurred in 2021: On January 1, the company issued 1,000,000 employee stock options. Each stock option allows for the purchase of one common share for $5 per share at any date between January 1, 2020 and April 30, 2024. The common shares were trading at $6 per share on January 1. . On March 31, the company repurchased 500,000 common shares for $10 per share. . On December 15, the company declared $100,000 in Class A preferred dividends and $175,000 in Class B preferred dividends. $275,000 in total dividends were paid on December 31. . Net income for the year amounted to $12,000,000. The company pays income tax at a rate of 30%. The average common share price was $8 during the year. Required: 1) Prepare a schedule of the weighted average common shares outstanding for 2021 [2 marks]. 2) Calculate basic earnings per share for 2021. [3 marks] 3) Identify all potentially dilutive securities and present their related incremental EPS. [9 marks] 4) Calculate the diluted earnings per share for 2021. Indicate any anti-dilutive securities. [5 marks]