Carla Corporation had a net income for the current year ending December 31, 2021 of $1,204,500. Throughout 2021 the following items were outstanding:

?		413,000 common shares
?		18,500 Class A $3 cumulative preferred shares that were convertible to common shares at a rate of 1:1
?		49,500 Class B $4 non-cumulative preferred shares that were convertible at a rate of one common share for every two preferred shares.
?		$551,000, 8% bonds that were convertible to 14,500 common shares
?		$303,000, 10% bonds convertible to 9,000 common shares

No dividends were declared or paid in 2021. Carla’s tax rate is 25%.

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

Potentially dilutive security		Incremental Numerator Effect		Incremental Denominator Effect		EPS
Class B Preferred shares		$				$

Answer rating: 100% (QA)

ANSWER Class B Preferred shares on being converted to equi... View the full answer