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Cold Goose Metal Works Inc. Income Statement for Year Ending December 3 1 Year 1 Net sales Less: Operating costs, except depreciation and amortization Less:

Cold Goose Metal Works Inc.
Income Statement for Year Ending December 31
Year 1
Net sales
Less: Operating costs, except depreciation and amortization
Less: Depreciation and amortization expenses
Operating income (or EBIT)
Less: Interest expense
Pre-tax income (or EBT)
Less: Taxes (25%)
Earnings after taxes
Less: Preferred stock dividends
Earnings available to common shareholders
Less: Common stock dividends
Contribution to retained earnings
$15,000,000
11,250,000
600,000
$3,150,000
315,000
2,835,000
708,750
$2,126,250
300,000
1,826,250
956,813
$869,437
Year 2(Forecasted)
$1,133,180
Given the results of the previous income statement calculations, complete the following statements:
In Year 2, if Cold Goose has 25,000 shares of preferred stock issued and outstanding, then each preferred share should expect to receive
in annual dividends.
If Cold Goose has 200,000 shares of common stock issued and outstanding, then the firm's earnings per share (EPS) is expected to change from
in Year 1 to
in Year 2.
Cold Goose's earnings before interest, taxes, depreciation and amortization (EBITDA) value changed from
in Year 1 to
in Year 2.
It is
to say that Cold Goose'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 earnings, $869,437 and $1,133,180, respectively. This is because
of the items reported in the income
statement involve payments and receipts of cash.
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