Question

Bridgeport Corporation had a net income for the current year ending December 31, 2021 of $1,211,000. Throughout 2021 the following items were outstanding: • 415,000 common shares • 20,000 Class A $3 cumulative preferred shares that were convertible to common shares at a rate of 1:1 52,000 Class B $4 non-cumulative preferred shares that were convertible at a rate of one common share for every two preferred shares. $510,000, 8% bonds that were convertible to 15,000 common shares • $287,000, 10% bonds convertible to 9,500 common shares No dividends were declared or paid in 2021. Bridgeport's tax rate is 25%. Calculate the income effect of the dividends on Class A preferred shares. Dividends on Class A preferred shares $ e Textbook and Media Calculate the income effect of the dividends on Class B preferred shares. Dividends on Class B preferred shares $

Answer 1

From the desk of Dinidend on shape= class A preferred $ Goooo' C 20000X $ 3) Dividend on class B preferred shaves - $208000 (52000X84) Basic EPS 8.27 [ $ 1211000 - $208000-$60000/ 415000 Aftee tax intexst Pon 8% bond - (510000X8%)(1-253) 2 $30600 Inuemental pershere effect Incxmental Incemental EPS Numerale denominator $ $30600 Svoo 226 $ 9736000 L430000 Bonds. Oddy

From the desk of 10% Bonds. Class A prefessed $21525 9500 $2.28 ($28700x75%) 18964525 L 424500 $60000 20000 $2.30 F$1003000 L 425000 $ 808000 52000 $2.46 $1157000) I shares Class B - presented Shases L 467000 Rank the 8% Bonds 10% Bonds Class A class B potentially deluhue Dilutine No aspect Anti delutive Antidiluhne Oddy

FOMU Calculate Delute EPS Premerahar beromenhos EPS Eamings $9.43000 415000 62- 22 & Bond & 30600 15000 10%. Bond $21525 9500 $995125 439500. Diluted eps = $.995125 = 22-26. 439500 Oddy