Question

Tamarisk Inc. had net income for the current year ending December 31, 2020 of $1,152.760. During the entire year, there were 504,000 common shares outstanding. The company had two classes of preferred shares outstanding: the Class A preferred shares were $2.38 cumulative shares of which 10,000 were outstanding, and were convertible to common shares at a rate of 1:1. There were 103,000 $6.38 Class B non-cumulative preferred shares outstanding that were also convertible at a rate of 1:1. Tamarisk had outstanding a $1,000,000,8% bond issued in 2009 that was convertible to 22,000 common shares. The company also had outstanding a $1,000,000,7% bond issued in 2010 that was convertible to 26,000 common shares. No dividends were declared or paid this year. Tamarisk's tax rate is 39%. Calculate the income effect of the dividends on Class A preferred shares. Dividends on Class A preferred shares $ Calculate the income effect of the dividends on Class B preferred shares, Dividends on Class B preferred shares $ 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 $

Answer 1

Since, there are multiple sub parts, I am supposed to answer only first 4 sub parts.
Page No.: Answer I Dividends on the Class A Preferred shares (os. o y can Koo! = No. of Preference shares X Amount of a outstanding = 10,000 x 2.38 V = $23,800 Since Class attributable paid later, A will when y Cumulative, the dividend become due and will be the company declares Dividends on Hass B for Preferred shares is , since will been Class B is only declared. Nar - Cumulative atter paid when the it divideod has Retained Earnings No. of common shary Basic Earning per share - I +),152,760 X (1-0.39) - 23,600 50400 7,03,18.3.60 - 23,800 5,0 4,000 = $ 1.35 per share

Date: Page No.: After Tax Intrust paid on 2009 bends 1,200, Doox (1-0.39) = = 8% x $48.800