Reference no: EM133033166

Question - Bramble Inc. had net income for the current year ending December 31, 2020 of $1,075,800. During the entire year, there were 503,000 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 105,000 $5.23 Class B non-cumulative preferred shares outstanding that were also convertible at a rate of 1:1. Bramble 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 25,000 common shares. No dividends were declared or paid this year. Bramble's tax rate is 38%.

Required -

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

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

3. Calculate basic earnings per share.

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

5. Determine an incremental per share effect for 2009 bonds.

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

7. Determine an incremental per share effect for 2010 bonds.

8. Determine an incremental per share effect for Class A preferred shares.

9. Determine an incremental per share effect for Class B preferred shares.

10. Rank the potentially dilutive securities from most dilutive to least dilutive.

11. Calculate diluted earnings per share.