Consider the following sCold Goose Metal Works Inc.

Income Statement for Year Ending December $31$

Year $1$ $$15,000,000$

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

Year $2($Forecasted$)$

$11,250,000$

$600,000$

$$3,150,000$

$315,000$

$2,835,000$

$708,750$

$$2,126,250$

$300,000$

$1,826,250$

$956,813$

$$869,437$

$$1,133,180$cenario:

Cold Goose Metal Works Inc.$$s income statement reports data for its first year of operation. The firm$$s CEO would like sales to increase by $25\%$ next year.

$1.$ Cold Goose 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 $75\%$ of net sales, and its depreciation and amortization expenses remain constant from year to year.

$3.$ The company$$s tax rate remains constant at $25\%$ of its pre$-$tax income or earnings before taxes $($EBT$).$

$4.$ In Year $2,$ Cold Goose expects to pay $$300,000$ and $$1,172,601$ of preferred and common stock dividends, respectively.

Complete the Year $2$ income statement data for Cold Goose, then answer the questions that follow. Be sure to round each dollar value to the nearest whole dollar.