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Pharoa hCorporation is preparing earnings per share data for 2020. The net income for the year ended December 31, 2020 was $394,000 and there were 60,000 common shares outstanding during the entire year. Pharoah has the following two convertible securities outstanding: 10% convertible bonds (each $1,000 bond is convertible into 20 common shares) $117,000 3% convertible $100 par value preferred shares (each share is convertible into 2 common shares) $51,000 Both convertible securities were issued at face value in 2017. There were no conversions during 2020, and Pharoah's income tax rate is 24%. The preferred shares are cumulative. For simplicity, ignore the requirement to record the debt and equity components of the bonds separately. Calculate the income effect of the dividends on preferred shares. $ Dividends on preferred shares eTextbook and Media Calculate Pharoah's basic earnings per share for 2020. (Round answer to 2 decimal .rJlchesI e3. 15.25.) $ Basic earnings per share Calculate the after-tax interest paid on the 10% bonds. After-tax interest LA e Textbook and Media Determine an incremental per share effect for each potentially dilutive security. (Round earnings per share to 2 decimal places, e.g. 15.25.) Incremental Incremental Potentially dilutive security Numerator Effect Denominator Effect EPS Bonds 10% to $ $ e Textbook and MediaDetermine an incremental per share effect for each potentially dilutive security. (Round earnings per share to 2 decimal places, e.g. 15.25.) Incremental Incremental Potentially dilutive security Numerator Effect Denominator Effect EPS 3% Preferred shares $ $ $ eTextbook and Media Rank the potentially dilutive securities from most dilutive to least dilutive. Rank 1 Rank 2 eTextbook and MediaCalculate Pharoah's diluted earnings per share for 2020. (Round earnings per share to 2 decimal places, e.g. 15.25.) Numerator Denominator EPS Basic $ V Sub Total V $ to e Textbook and Media Recalculate Pharoah's basic and diluted earnings per share for 2020, assuming instead that the preferred shares pay a 15% dividend. Calculate the income effect of the dividends on preferred shares. Dividends on preferred sharesCalculate Pharoah's basic earnings per share for 2020. (Round answer to 2 decimal places, e.g. 15.25.) Basic earnings per share $ eTextbook and Media Determine an incremental per share effect for the 15% preferred shares. (Round earnings per share to 2 decimal places, e.g. 15.25.) Incremental Incremental Potentially dilutive security Numerator Effect Denominator Effect EPS 15% Preferred shares $ $ The 15% shares are eTextbook and MediaCalculate Pharoah's dilutive earnings per share for 2020. (Round answer to 2 decimal places, e.g. 15.25.) Diluted earnings per share $ eTextbook and Media
