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  3. ivanhoe corporation had net income of $52,700 for

Ivanhoe Corporation had net income of $52,700 for the year ended December 31, 2020, and...

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Accounting

Ivanhoe Corporation had net income of $52,700 for the year ended December 31, 2020, and a weighted average number of common shares outstanding of 10,400. The following information is provided regarding the capital structure:

1. 6% convertible debt, 260 bonds each convertible into 46 common shares. The bonds were outstanding for the entire year. The income tax rate is 40%. The bonds were issued at par ($1,000 per bond). No bonds were converted during the year.

2. 4% convertible, cumulative $110 preferred shares, 1,100 shares issued and outstanding. Each preferred share is convertible into 2 common shares. The preferred shares were issued at par and were outstanding the entire year. No shares were converted during the year.

Calculate the income effect of the dividends on preferred shares.

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