3. Financial statements and reports The income statement, also known as the profit and loss (PEL) statement, provides a snopshot of the financiat performance of a company during a specified period of time, It reports a firms gross income, expenses, net income, and the income that is available for distribution to its preferred and common shareholders. The income statement is prepared using the generally accepted accounting principles (GAMP) that motch the firm's revenues and expenses 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 incorne statement and other financial statements and reports to evaluate the company's financial performanci and condition. Conslider the following scenatio: next year: 1. Blue Hamster is able to achieve this level of increased sales, but its interest costs increase from 104 to 15% of earnings before interest and taxes (EBrr). 2. The companyt operating costs (excluding depreciation and amortization) remain at 70s, of net sales, and its depreciation and amortization expenses remain constant from vear to veas. 3. The companys tax rate remains conatant at 40% of its pre-tax income or earnings before taxes (Lid). 4. In Year 2, Bive Hamster expects to pay \$200,000 and \$512,550 of preferred and common stock dividends, fespectivehy. Complete the Year 2 income statement data for Blue Hamster, then answer the questions that follow, Be sure to round each doliar value to the nearest whole dollar. Given the results of the previous income statement calculations, complete the following statements: - In Year 2, if Blue Hamster has 5,000 shares of preferred stock issued and outstanding, then each preferred share should expect to receive in annual dividends. - If Bive Haraster has 400,000 shares of icommon stock issued and outstanding, then the firm \& earnings per share (EPS) is expected to change from in Year 1 to in Year 2. - Bive Hamster's before interest, taxes, depreciation and amortization (EBrTOA) value changed from in Year 2. - It is to say that Blue Hamster's net inflows and outflows of cash at the end of Years 1 and 2 are equal to the company's annual contribution to retained eamings, $782,800 and $995,950, respectively. This is because of the items reported in the income statement involve payments and receipts of cash