Answered step by step
Verified Expert Solution
Link Copied!

Question

...
1 Approved Answer

solve all clearly Windsor Inc had net income for the current year ending December 31, 2020 of $1,069.530. During the entire year, there were 500,000

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
solve all clearly
Windsor Inc had net income for the current year ending December 31, 2020 of $1,069.530. During the entire year, there were 500,000 common shares outstanding. The company had two classes of preferred shares outstanding the Class A preferred shares were $2.23 cumulative shares of which 11,000 were outstanding, and were convertible to common shares at a rate of 1:1. There were 100,000 $5.23 Class B non-cumulative preferred shares outstanding that were also convertible at a rate of 1:1. Windsor had outstanding a $1,000,000,7% bond issued in 2009 that was convertible to 21.000 common shares. The company also had outstanding a $1,000,000,6% bond issued in 2010 that was convertible to 26,000 common shares. No dividends were declared or paid this year. Windsor's tax rate is 38%. Calculate the income effect of the dividends on Class A preferred shares. Dividends on Class A preferred shares $ 24530 Calculate the income effect of the dividends on Class B preferred shares. Dividends on Class B preferred shares 0 e Textbook and Media 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 $ 209 Calculate the after-tax interest paid on the 2009 bonds. $ 43400 After-tax interest on 2009 bonds converted e Textbook and Media Determine an incremental per share effect for 2009 bonds. (Round earnings per share to 3 decimal places, eg. 15.257.) Incremental Numerator Effect Incremental Denominator Effect Potentially dilutive security EPS 2009 Bonds $ 43400 21000 $ 2.07 Calculate the after-tax interest paid on the 2010 bonds. 43400 After-tax interest on 2010 bonds converted eTextbook and Media Determine an incremental per share effect for 2010 bonds. (Round earnings per share to 3 decimal places, eg. 15.257.) Potentially dilutive security Incremental Numerator Effect Incremental Denominator Effect EPS 8% Bonds 37200 26000 $ 1.43 e Textbook and Media Determine an incremental per share effect for Class A preferred shares. (Round earnings per share to 2 decimal places, eg. 15.25.) Incremental Numerator Effect Incremental Denominator Effect EPS Potentially dilutive security $ Class A preferred shares $ e Textbook and Media Determine an incremental per share effect for Class B preferred shares. (Round earnings per share to 2 decimal places, eg. 15.25.) Incremental Numerator Effect Incremental Denominator Effect EPS Potentially dilutive security $ $ Class B preferred shares Rank the potentially dilutive securities from most dilutive to least dilutive. 2009 bonds 2010 bonds

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions