Mills Company had five convertible securities outstanding during all of 2013. It paid the appropriate interest (and amortized any related premium or discount using the straight-line method) and dividends on each security during 2013. Each convertible security is described in the following table. The corporate income tax rate is 30%.

Required:
1. Prepare a schedule that lists the impact of the assumed conversion of each convertible security on diluted earnings per share.
2. Prepare a ranking of the order in which the securities would be included in the diluted earnings per share computations.

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Security Description 9.5% preferred stock 11 .0% bonds 8.0% preferred stock 10.0% bonds 9.0% bonds $200,000 par value- issued at 1 12. Each $100 par preferred stock is convertible into 4.2 shares of common stock $220,000 face value. Issued at par. Each $1,000 bond is convertible into 44 shares of commorn stock $150,000 par value. issued at par. Each $100 par preferred stock is convertible into 3.8 shares of common stock. 100,000 face value. Issued at 94. Discount being amortized over 20-year life. Each $1,000 bond is convertible into 55 shares of common stock $200,000 face value. Issued at 108. Premium being amortized over 25-year life. Each $1,000 bond is convertible into 48 shares of common stock.