Income Statement Years Ending December 31 Net sales Fixed operating costs, except depreciation and amortization Depreciation and amortization expenses Net operating income (or EBIT) Interest Earnings before taxes (or EBT) Taxes (40%) Net Income Preferred dividends Earnings available to common stockholders (EAC) Common dividends Addition to retained earnings Year 2 (Forecasted) 18,750,000 (13,125,000) (600,000) 5,025,000 (753,750) 4,271,250 (1,708,500) 2,562,750 (100,000) 2,462,750 (896,963) $1,565,787 Year 1 $15,000,000 (10,500,000) (600,000) $3,900,000 (390,000) $3,510,000 (1,404,000) $2,106,000 (100,000) $2,006,000 (737,100) $1,268,900 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, $1,268,900 and $1,565,787, respectively. This is because statement involve payments and receipts of cash. of the items reported in the income It is cont state Net operating income (or EBIT) Interest tization expenses Earnings before taxes (or EBT) Taxes (40%) Net Income Preferred dividends Earnings available to common stockholders (EAC) Common dividends Addition to retained earnings incorrect correct (13,125,000) (600,000) 5,025,000 (753,750) 4,271,250 (1,708,500) 2,562,750 (100,000) 2,462,750 (896,963) $1,565,787 v0,000 (10,500,000) (600,000) $3,900,000 (390,000) $3,510,000 (1,404,000) $2,106,000 (100,000) $2,006,000 (737,100) $1,268,900 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 etained earnings, $1,268,900 and $1,565,787, respectively. This is because of the items reported in the income e payments and receipts of cash. It is Interest Earnings before taxes (or EBT) Taxes (40%) Net Income Preferred dividends Earnings available to common stockholders (EAC) Common dividends Addition to retained earnings 5,025,000 (753,750) 4,271,250 (1,708,500) 2,562,750 (100,000) 2,462,750 (896,963) $1,565,787 $3,900,000 (390,000) contribution to retained earnings, $1,268,900 and $1,565,787, respectively. This is because statement involve payments and receipts of cash. $3,510,000 (1,404,000) $2,106,000 (100,000) $2,006,000 (737,100) $1,268,900 to say that Cold Goose's net inflows and outflows of cash at the end of Years 1 and 2 are equal to th of the item all but one all