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The income statement, also known as the profit and loss (PQL) statement, provides a snapshot of the financial performance of a company during a specified period of time. It reports a firm's 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 (GAAP) that match 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 income Consider the following scenario: Green Caterpilar. Garden Supplies Incis income statement reports dato for its first year of operation. The firm's CEO would like sales to increase by 25\% next year. 1. Green Caterpiliar is able to achieve this level of increased sales, but its interest costs increase from 10% to 15% of earnings before interest and taxes (EBIT). 2. The company's operating costs (excluding depreciation and amortization) remain at 50% of net soles, and its depreciation and amortization expenses remain constant from year to year. 3. The company's tax rate remains constant at 40% of its pre-tax income or eamings before taxes (EBT) 4. In Year 2, Green Caterpiflar expects to pay 5100,000 and 51,407,600 of preferred and common stock alvidends, respectively. Complete the Year 2 .income statement data for Green Caterpillac, then answer the questions that follow, Be wure to round each dollar value to the Grven the results of the previous income statement calculations, complete the following statements: - In Year 2, if Green Caterpiliar has 5,000 shares of preferred stock issued and outstanding, then each preferred share should expect to recelve in annual dividends. - If Green Caterpiliar has 400,000 shares of common stock issued and outstanding, then the firm's eamings per share (EPS) is expected to change from in Year I to in Year 2. - Green Caterpillar's earnings before interest, taxes, depreciation and amortiration (EDITDA) value changed from in Year 2. in Year 1 to - It is: to say that Green Gaterplliar's fet inflows ande Given the results of the previous income statement calculations, complete the following statements: - In Year 2, If Green Caterpiliar has 5,000 shares of preferred stock issued and outstanding, then each preferred share should expect to receive in anhual dividends. - If Green Caterpiliar has 400,000 shares of common stock issued and outstanding, then the firm's eamings per share (EPs) is expected to change. from in Year 1 to in Year 2 . - Green Caterpaiaris earnings before interest, takes, dopreciation and amortization (EBrTDA) value changed from in Year 2. in Year I to It is to say that Green Caterpillar's net infows and outflows of cesh at the end of Years 1 and 2 are equal to the company's annual contribution to retained earnings, $1,649,600 and $2,011,400, respectively. This is because statement involve payments and recelpts of cash. of the items reported in the income