Attempts: Keep the Highest: /17 3. Income statement A Aa The income statement, diskon as the pront and bass (PRL) statement, provides a snapchat of the financial performance of a company during a specified period of time. It reports a fim's guss inome, experees, net inoame, and the income that is available for distribution to its prefered and common shareholders. The income statement is prepared using the generally accepted accounting principles (AAP) that match the firm's revenues and experees to the period in which they were incurred, not necessarily when cash was received or paid. Investors and analysts use the information given in the income statement and other financial statements and reports to evaluate the company's financial performance and condition Consider the following scenaria: Green Caterpiler Garden Supplies Inc.'s inome statement reports data for its first year of operation. The firm's CEO would Ike sales to increase by 25% next year. 1. Green Catepilar is able to achieve this level of increased sales, but its intestat increase from 10% to 15% of eamings before interest and taxes (EBIT) 2. The company's operating costs (excluding depredstion and amortization) remain at 75% of net sales, and is depredstion and amortization experees remain constant from year to year. 3. The company's tax rate remains constant st 40% of its pre-tax income or samings before taxes (ET). 4. In Year 2, Green Catepilar expects to pay $100,000 and $435,413 of preferred and common stock dividenck, respectively. Complete the Year 2 income statement data for Green Catepilar, then answer the questions that follow. Be sure to round each dollar value to the nearest whole dollar. Green Caterpillar Garden Supplies Inc. Income Statement for Year Ending December 31 Year 2 (Forecasted) 400,000 Ket sales Less: Operating costs, except depredation and smartzation Less: Depreciation and amortization experees Operating income for EDIT) Less: Interest expense Pre-tax income for EET) Less: Taxes (40%) Esmings after taxes Less: Preferred stock dividend Earings available to common shareholders Less: Comman stack dividence Contribution to retained carings Year 1 $10,000,000 7,500,000 400,000 $2,100,000 210,000 1,890,000 756,000 $1,134,000 100,000 1,034,000 396,900 $637,100 $303,327 Given the results of the previous income statement calculations, complete the following statements: In Year 2, Green Catepilar les 10,000 shares of preferred stack issued and outstanding, then sach preferred share should expect to receive in annual dividends. . Green Catepilar has 500,000 shars of comman stod ud and outstanding, then the firm's camings por shaz (EPS) is expected to charge from in Year 1 to in Year 2. Green Caterpilars before interes, taxes, depredstion and amartization (EBITDA) value charged from in Year 2. in Year 1 to . Its to say that Green Catepilars net inflows and outflows of cash at the end of years 1 and 2 are equal to the company's annual contribution to retained samings, $537,100 and $803,327, respectively. This is because of the item reported in the income statement involve payments and receipts of cash