NOTE: THIS IS PART B AND IT USES THE SAME DATAAS THE PREVIOUS QUESTION (QUESTION #1) The net income for Peanut Butter Jam for the year ended December 31,2021 was $1,400,000 Peanut Butter Jam had 30,000 ordinary shares outstanding at the beginning of the year. Peanut Butter Jam declared and distributed a 3-for-1 stock split on May 1,2021 and issued 40,000 ordinary shares on November 1, 2021. Select details of Peanut Butter Jam's habilties and equities are as follows - Bonds A- $1,400,000,11%,10-year, semi-annual bonds issued on July 1, 2021. At the option of the holder, each $1,000 bond can be converted into 20 ordinary shares at any time before expiry. (hint: as bonds issued during the year, must prorate income effect \& share effect] - Bonds B-\$1,500,000, 9\%, semi-annual bonds maturing September 30, 2025. The owners of the bonds elect to convert thern into 25,500 ordinary shares on December 1, 2021. (hint: as bonds are converted on DEC 1, must prorate income effect \& share effect for the * of the months the bonds were outstanding during the year? - 50,000 cumulative preferred shares that are each entitled to dividends of $20.00 per annum. Dividends are not declared in 2021. - Peanut Butter Jam's corporate tax rate was 30%. The recorded conversion factor for the convertible bonds has already been adjusted for the stock split. REQUIRED. Assuming that the effective rate of interest on the bonds equals the coupon rate: a. Prepare a schedule that sets out the income effect, share effect, and incremental EPS for each secunty that is convertible into ordinary shares, Rank the potential ordinary shares by their dilutiveness NOTE: do NOT enter S or commas (.) when entering your answers. a. Prepare a schedule that sets out the income effect, share effect, and incremental EpS fot each secunty that is converible into ordary shares. Rank the potential ordinary shares by their dilutrveness. NOTF- an Mnt aniar o a b) caiculate diluewe earaings per ahare for 2021 for Peanut Butter Jam NOTE do NOT enter $ or commas , when ertering your answers. Round firar atviver to 2 decimal places NOTE: THIS IS PART B AND IT USES THE SAME DATAAS THE PREVIOUS QUESTION (QUESTION #1) The net income for Peanut Butter Jam for the year ended December 31,2021 was $1,400,000 Peanut Butter Jam had 30,000 ordinary shares outstanding at the beginning of the year. Peanut Butter Jam declared and distributed a 3-for-1 stock split on May 1,2021 and issued 40,000 ordinary shares on November 1, 2021. Select details of Peanut Butter Jam's habilties and equities are as follows - Bonds A- $1,400,000,11%,10-year, semi-annual bonds issued on July 1, 2021. At the option of the holder, each $1,000 bond can be converted into 20 ordinary shares at any time before expiry. (hint: as bonds issued during the year, must prorate income effect \& share effect] - Bonds B-\$1,500,000, 9\%, semi-annual bonds maturing September 30, 2025. The owners of the bonds elect to convert thern into 25,500 ordinary shares on December 1, 2021. (hint: as bonds are converted on DEC 1, must prorate income effect \& share effect for the * of the months the bonds were outstanding during the year? - 50,000 cumulative preferred shares that are each entitled to dividends of $20.00 per annum. Dividends are not declared in 2021. - Peanut Butter Jam's corporate tax rate was 30%. The recorded conversion factor for the convertible bonds has already been adjusted for the stock split. REQUIRED. Assuming that the effective rate of interest on the bonds equals the coupon rate: a. Prepare a schedule that sets out the income effect, share effect, and incremental EPS for each secunty that is convertible into ordinary shares, Rank the potential ordinary shares by their dilutiveness NOTE: do NOT enter S or commas (.) when entering your answers. a. Prepare a schedule that sets out the income effect, share effect, and incremental EpS fot each secunty that is converible into ordary shares. Rank the potential ordinary shares by their dilutrveness. NOTF- an Mnt aniar o a b) caiculate diluewe earaings per ahare for 2021 for Peanut Butter Jam NOTE do NOT enter $ or commas , when ertering your answers. Round firar atviver to 2 decimal places
