Cute Camel Woodcraft Company's income statement reports data for its first year of

operation. The firm's CEO would like sales to increase by $25\%$ next year.

Cute Camel 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$).$

The company's operating costs $($excluding depreciation and amortization$)$ remain

at $70\%$ of net sales, and its depreciation and amortization expenses remain

constant from year to year.

The company's tax rate remains constant at $40\%$ of its pre$-$tax income or

earnings before taxes $($EBT$).$

In Year $2,$ Cute Camel expects to pay $$200,000$ and $$1,025,100$ of preferred and

common stock dividends, respectively.

Complete the Year $2$ income statement data for Cute Camel, then answer the questions that follow.

Be sure to round each dollar value to the nearest whole dollar.

Cute Camel Woodcraft Company Income Statement

For Year Ending December $31$

Given the results of the previous income statement calculations, complete the following

statements:

In Year $2,$ if Cute Camel has $5,000$ shares of preferred stock issued and outstanding, then each

preferred share should expect to receive

in annual dividends.

If Cute Camel has $400,000$ 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

Cute Camel's before interest, taxes, depreciation and amortization $($EBITDA$)$ value changed

from

$\_$ in Year $1$ to

in Year $2.$

It is

to say that Cute Camel'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. This is

because

of the item reported in the income statement involve payments and

receipts of cash.