?Fuzzy Button Clothing 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. 1. Fuzzy Button is able to achieve this level of increased sales, but it's interest costs increased from 10% to 15% of earnings before interest and taxes (EBIT). 2. The company's operating costs (excluding depreciation and amortization) remain at 65% of net sales, and its depreciation and amortization expenses remain constant from year to year. 3. The company tax rate remains constant at 40% of its pre-tax income or earnings before taxes (EBIT). 4. In year 2, Fuzzy Button expects to pay $200,000 and $1,250,775 of preferred and common stock dividends, respectively. complete year 2 income statement

Complete the Year 2 then statement data for F Button, then answer the questions that follow. Be sure to round each dollar value to the nearest nt uzzy whole dollar. Fuzzy Button Clothing Company Income Statement for Year Ending December 31 Year 2 (Forecasted) Year 1 Net sales $30,000,000 Less: Operating costs, except depreciation and amortization 22,500,000 Less: Depreciation and amortization expenses 1,200,000 1,200,000 operating income (or EBIT) $1,192,500 $6,300,000 Less: Interest expense 630,000 Pre-tax income (or EBT) 5,670,000 Less: Taxes (40%) 2,268,000 Earnings after taxes $3,402,000 Less: Preferred stock dividends 200,000 Earnings available to common shareholders 3,202,000 Less: Common stock dividends 1,020,600 Contribution to retained earnings $2,181,400 $2,718,475