Sunland Corporation had net income of $50,500 for the year ended December 31, 2020, and a weighted average number of common shares outstanding of 12,400. The following information is provided regarding the capital structure:

1.

8% convertible debt, 260 bonds each convertible into 42 common shares. The bonds were outstanding for the entire year. The income tax rate is 40%. The bonds were issued at par ($1,150 per bond). No bonds were converted during the year.

2.

3% convertible, cumulative $110 preferred shares, 1,100 shares issued and outstanding. Each preferred share is convertible into 4 common shares. The preferred shares were issued at par and were outstanding the entire year. No shares were converted during the year.

Calculate the income effect of the dividends on preferred shares.

Dividends on preferred shares

$enter the Dividends on preferred shares in dollars

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

$enter a dollar amount

enter a dollar amount

$enter a dollar amount rounded to 2 decimal places

Determine an incremental per share effect for 3% preferred shares. (Round earnings per share to 2 decimal places, e.g. 15.25.)

Potentially dilutive security

Incremental Numerator Effect

Incremental Denominator Effect

EPS

3% Preferred shares

$enter a dollar amount

enter a dollar amount

$enter a dollar amount rounded to 2 decimal places

Calculate the diluted earnings per share for 2020, using the ifconverted method. For simplicity, ignore the requirement to record the debt and equity components of the bonds separately. (Round earnings per share to 2 decimal places, e.g. 15.25.)

		Numerator		Denominator		EPS
Basic		$		$		$
Bonds		$		$		$
Sub Total		$		$		$
Preferred shares		enter a dollar amount		enter a dollar amount
		$enter a total amount		enter a total amount		$enter a dollar amount rounded to 2 decimal places

Diluted EPS

enter the diluted earnings per share in dollars