The income statement of Kimberley Corporation for the year ended December $31$st$,$ Year $1,$ is presented below:

Sales: $$14,000$

$-$ Undistributed income of less than $50\%-$owned affiliates: $$300$

$=$ Total revenue: $$14,300$

$-$ Cost of goods sold: $$6,000$

$-$ Selling and administrative expenses: $$2,000$

$-$ Depreciation: $$600$

$-$ Rental expense: $$500$

$-$ Share of minority interest in consolidated income: $$200$

$-$ Interest expense: $$400$

$=$ Income before taxes: $$4,600$

$-$ Current Income Taxes: $$900$

$-$ Deferred Income Taxes: $$400$

$=$ Net income: $$3,300$

$-$ Less Dividends Common stock: $$300$

$-$ Less Dividends Preferred stock: $$400$

$=$ Earnings retained for the year: $$2,600$

Additional Information:

Changes in Current Assets and Liabilities for Year $1$:

Accounts receivable increased by $$900$

Inventories decreased by $$800$

Notes payable to bank decreased by $$200$

Accounts payable increased by $$700$

Dividends payable decreased by $$100$

Effective tax rate: $40\%$

Shares of minority interests in consolidated income: Do not have fixed charges.

Interest expense breakdown:

Interest incurred $($except items below$)$: $$600$

$-$ Amortization of bond premium: $$300$

$+$ Interest on capitalized leases: $$140$

$=$ Interest incurred: $$440$

$-$ Less interest capitalized: $$40$

$=$Total interest expense: $$400$

Capital stock:

$$1\mathrm{.}10$ cumulative redeemable preferred, stated value $$5\mathrm{.}00$ per share $($redeemable at $$20\mathrm{.}00$ share$)$: $$1,500$

$+400,000$ Class A shares, no par value $($note $2)$: $$14,000$

$+1,000,000$ common shares, no par value: $$6,000=$ Total capital stock: $$21,500$

$+$ Paid$-$in capital: $$7,000$

$+$ Retained earnings: $$18,500$

$=$Total long$-$term debt and equity: $$82,000$

Notes:

Combined annual sinking fund payments are $$500.$

Subject to the rights of the preferred shares, the Class A shares are entitled

to fixed cumulative dividends at the rate of $$2\mathrm{.}50$ per share per annum and are

convertible at the holder's option, at any time, into common shares on the basis

of two common shares for one Class A share.

Help me solve this:

a$.$ Compute the $(1)$ earnings coverage ratio for Year $7,$ and $(2)$ average earnings coverage ratio for the five$-$year pe$-$

riod Year $3$ through Year $7($inclusive$),$ separately on the first mortgage bonds and on the sinking fund deben$-$

tures at the end of Year $7.$

b$.$ Compute the long$-$term debt to equity ratio as of December $31,$ Year $7,$ and identify the proportion of equity rep$-$

resented by shares senior to common shares.

c$.$ Assuming a $50\%$ income tax rate, calculate the $(1)$ earnings coverage ratio for Year $7,$ and $(2)$ average earnings

coverage ratio for the five$-$year period Year $3$ through Year $7($inclusive$),$ on the $$1\mathrm{.}10$ cumulative redeemable

preferred shares at the end of Year $7.$

d$.$ Assuming a $50\%$ income tax rate and full conversion of the Class A shares, calculate earnings per common

share for the end of Year $7.$