Green Caterpillar Garden Supplies Inc. Income Statement for Year Ending December 31 Year 2 (Forecasted) Year 1 600,000 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 (40%) 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 1,134,000 $1,701,000 300,000 1,401,000 765,450 $635,550 $846,544 Given the results of the previous income statement calculations, complete the following statements: In Year 2, if Green Caterpillar has 25,000 shares of preferred stock issued and outstanding, then each preferred share should expect to receive in annual dividends. If Green Caterpillar 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. in Year 1 to Green Caterpillar's before interest, taxes, depreciation and amortization (EBITDA) value changed from in Year 2 It is to say that Green Caterpillar'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, $635,550 and $846,544, respectively. This is because of the item reported in the income statement involve payments and receipts of cash. Green Caterpillar Garden Supplies Inc. Income Statement for Year Ending December 31 Year 2 (Forecasted) Year 1 600,000 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 (40%) 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 1,134,000 $1,701,000 300,000 1,401,000 765,450 $635,550 $846,544 Given the results of the previous income statement calculations, complete the following statements: In Year 2, if Green Caterpillar has 25,000 shares of preferred stock issued and outstanding, then each preferred share should expect to receive in annual dividends. If Green Caterpillar 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. in Year 1 to Green Caterpillar's before interest, taxes, depreciation and amortization (EBITDA) value changed from in Year 2 It is to say that Green Caterpillar'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, $635,550 and $846,544, respectively. This is because of the item reported in the income statement involve payments and receipts of cash
