Question 22 Kingbird Ltd reported Long-Term Liabilities and Shareholders' Equity in its December 31, 2021 balance sheet as follows: Long Term Liabilities: Bonds Payable $2,100,000 6% interest, convertible to 40 common shares/$1,000 bond $5,400,000 Bonds Payable 9% interest, convertible to 40 common shares/$1,000 bond Shareholders' Equity: Class A Preferred shares no par value, $3 dividend, cumulative, each preferred share convertible into 8 common shares, 250,000 authorized, issued and outstanding $2,000,000 Class B Common shares No-par, 3,300,000 authorized, issued and outstanding $6,600,000 All of the above reported bonds payable, preferred shares and common shares were outstanding throughout fiscal 2021. No transactions involving the bonds payable, preferred shares or common shares occurred during fiscal 2021, except for interest on the bonds payable. The bonds payable were all issued and sold at par. Preferred dividends had not been declared in fiscal 2020. Kingbird also had Class B common stock written call options to purchase 100,000 common shares at $6,00 per share outstanding throughout fiscal 2021. No options were exercised during fiscal 2021. The fair market value of Kingbird's common shares was $10.00 per share throughout fiscal 2021. Kingbird's income tax rate is 15%. The weighted average of common shares outstanding for 2021 was 3,300,000 common shares, and Kingbird earned net income of $5,100,000. Calculate the income effect of the dividends on Class A preferred shares. Activate Windows Go to Set as to act de Dividends on preferred shares $ Calculate Kingbird's fiscal 2021 basic eamings per share. (Round calculations of EPS to 3 decimal places, e.g. $3.545 and provide final answer to 2 decimal places, e.g. 15.25.) Basic Eamings Per Share SU Calculate the after-tax interest paid on the 6% bonds. After-tax interest on 6% bonds $ Determine an incremental per share effect for 6% bonds. (Round earnings per share to 3 decimal places, e.g. 15.257.) Incremental Numerator Effect Incremental Denominator Effect EPS Potentially dilutive security 6% Bonds su Calculate the after-tax ad on the 9% bonds. After-tax interest on 9% bonds s Determine an incremental per share effect for 9% bonds. (Round earnings per share to 3 decimal places, e.g. 15.257.) Incremental Numerator Effect Potentially dilutive security Incremental Denominator Effect EPS 9% Bonds $ Determine an incremental per share effect for Class A preferred shares. (Round earnings per share to 3 decimal places, e.g. 15.257.) Incremental Numerator Effect Incremental Denominator Effect EPS Potentially dilutive security Class A preferred shares $ Calculate the proceeds from assumed exercise of options. Proceeds from exercise of options $ Calculate the incremental shares oustanding upon the exercise of options. The incremental shares oustanding upon the exercise of options Rank the potentially dilutive securities from most dilutive to least dilutive. 6% bonds 9% bonds Class A preferred shares Options Calculate Kingbird's fiscal 2021 diluted earnings per share. (Round calculations of EPS to 3 decimal places, e.g. $3.545 and provide final answer to 2 decimal places, e.g. 15.25.) Numerator Denominator EPS $ Basic Sub Total Sub Total Activate Windows to Setto de Diluted EPS