Chapter 16, Problem 21E

Mills Company had five convertible securities outstanding during all of 2019. It paid the appropriate interest (and amortized any related premium or discount using the straight-line method) and dividends on each security during 2019. Each convertible security is described in the following table. The corporate income tax rate is 30%.

Required:

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