Sheffield Corporation had a net income for the current year ending December 31, 2021 of $1,202,500. Throughout 2021 the following items were outstanding: 406,500 common shares . 20,500 Class A $3 cumulative preferred shares that were convertible to common shares at a rate of 1:1 50,000 Class B $4 non-cumulative preferred shares that were convertible at a rate of one common share for every two preferred shares. . $507,000, 8% bonds that were convertible to 13,000 common shares . $316,000, 10% bonds convertible to 10,000 common shares No dividends were declared or paid in 2021. Sheffield's tax rate is 25%. Calculate the income effect of the dividends on Class A preferred shares. Dividends on Class A preferred shares $ Calculate the income effect of the dividends on Class B preferred shares. Dividends on Class B preferred shares $ Calculate basic earnings per share. (For simplicity, ignore the requirement to record the debt and equity portions of the convertible bond separately). (Round answer to 2 decimal places, e.g. 15.25.) Basic earnings per share $ Calculate the after-tax interest paid on the 8% bonds. After-tax interest on 8% bonds converted $ Determine an incremental per share effect for 8% bonds. (Round earnings per share to 2 decimal places, e.g. 15.25.) Potentially dilutive security Incremental Numerator Effect Incremental Denominator Effect EPS 8% Bonds $ $ $ Calculate the after-tax interest paid on the 10% bonds. After-tax interest on 10% bonds converted $ Determine an incremental per share effect for 10% bonds. (Round earnings per share to 2 decimal places, e.g. 15.25.) Potentially dilutive security Incremental Numerator Effect Incremental Denominator Effect EPS 10% Bonds $ $ Determine an incremental per share effect for Class A preferred shares. (Round earnings per share to 2 decimal places, e.g. 15.25.) Potentially dilutive security Incremental Numerator Effect Incremental Denominator Effect EPS Class A preferred shares $ Determine an incremental per share effect for Class B preferred shares. (Round earnings per share to 2 decimal places, e.g. 15.25.) Potentially dilutive security Incremental Numerator Effect Incremental Denominator Effect EPS Class B Preferred shares $ $ Rank the potentially dilutive securities from most dilutive to least dilutive. Class B preferred shares 8% bonds 10% bonds Class A preferred shares Calculate 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 $ $ Diluted EPS
