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. Windsors tax rate is 38%.

Calculate the income effect of the dividends on Class A preferred shares.

Dividends on Class A preferred shares

$Enter your answer in accordance to the question statement

Calculate the income effect of the dividends on Class B preferred shares.

Dividends on Class B preferred shares

$Enter your answer in accordance to the question statement

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

$Enter your answer in accordance to the question statement

Calculate the after-tax interest paid on the 2009 bonds.

After-tax interest on 2009 bonds converted

$Enter your answer in accordance to the question statement

Determine an incremental per share effect for 2009 bonds. (Round earnings per share to 3 decimal places, e.g. 15.257.)

Potentially dilutive security		Incremental Numerator Effect		Incremental Denominator Effect		EPS
2009 Bonds		$				$

Calculate the after-tax interest paid on the 2010 bonds.

After-tax interest on 2010 bonds converted

$Enter your answer in accordance to the question statement

Determine an incremental per share effect for 2010 bonds. (Round earnings per share to 3 decimal places, e.g. 15.257.)

Potentially dilutive security		Incremental Numerator Effect		Incremental Denominator Effect		EPS
8% 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.

2009 bonds		Rank 1Rank 2Rank 3Rank 4Anti-dilutive
2010 bonds		Rank 1Rank 2Rank 3Rank 4Anti-dilutive
Class A preferred shares		Rank 1Rank 2Rank 3Rank 4Anti-dilutive
Class B preferred shares		Rank 1Rank 2Rank 3Rank 4Anti-dilutive

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		$				$
2009 bonds2010 bondsClass A preferred sharesClass B preferred shares
Sub Total
2009 bonds2010 bondsClass A preferred sharesClass B preferred shares
Sub Total
2009 bonds2010 bondsClass A preferred sharesClass B preferred shares
		$				$

Diluted EPS