SheridanCorporation had a net income for the current year ending December 31, 2021 of $1,202,500. Throughout 2021 the following items were outstanding:
406,500common shares20,500Class A $3cumulative preferred shares that were convertible to common shares at a rate of 1:150,000Class B $4non-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 to13,000common shares$316,000, 10% bonds convertible to10,000common shares
No dividends were declared or paid in 2021.Sheridan's tax rate is 25%.
V Your answer is correct. Calculate the income effect of the dividends on Class A preferred shares. Dividends on Class A preferred shares $ 61500 e Textbook and MediaYour answer is correct. Calculate the after-tax interest paid on the 10% bonds. After-tax interest on 10% bonds converted 23700 eTextbook and Media X Your answer is incorrect. Determine an incremental per share effect for 10% bonds. (Round earnings per share to 2 decimal places, e.g. 15.25.) Potentially dilutive Incremental Incremental security Numerator Effect Denominator Effect EPS 10% Bonds 964,700 416,500 2.32 eTextbook and MediaSheridan 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. Sheridan's tax rate is 25%.Your answer is incorrect. Calculate the income effect of the dividends on Class B preferred shares. Dividends on Class B preferred shares $ 0 eTextbook and Media Your answer is incorrect. 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 2.81 eTextbook and MediaX Your answer is incorrect. 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 Incremental Incremental security Numerator Effect Denominator Effect EPS Class A preferred shares 1002500 427,000 2.35 eTextbook and Media X Your answer is incorrect. 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 Incremental Incremental security Numerator Effect Denominator Effect EPS Class B Preferred shares 1,041,000 431500 2.41Your answer is correct. Calculate the after-tax interest paid on the 8% bonds. After-tax interest on 8% bonds converted $ 30420 eTextbook and Media - Your answer is partially correct. Determine an incremental per share effect for 8% bonds. (Round earnings per share to 2 decimal places, e.g. 15.25.) Potentially dilutive Incremental Incremental security Numerator Effect Denominator Effect EPS 8% Bonds 971420 419,500 2.33 eTextbook and MediaYour answer is partially correct. Rank the potentially dilutive securities from most dilutive to least dilutive. Class B preferred shares Anti-dilutive 8% bonds Rank 1 10% bonds Rank 2 Class A preferred shares Anti-dilutive eTextbook and Media Your answer is partially correct. 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 941,000 406,500 8% bonds 30420 13000 Sub Total 971420 419,500 3% bonds 23700 10000 Sub Total 1,056,620 429,500 Class A preferred shares
