Interest versus dividend expense$$Michaels Corporation expects earnings before interest and taxes to be $ $50$ comma $000$ for the current period. Assuming a flat ordinary tax rate of $21\%,$ compute the$$ firm's earnings after taxes and earnings available for common stockholders$($earnings after taxes and preferred stock$$ dividends, if$$ any$)$ under the following$$ conditions:

a$.$ The firm pays $ $12$ comma $000$ in interest.

b$.$ The firm pays $ $12$ comma $000$ in preferred stock dividends.

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Part $1$

a$.$ Complete the fragment of Michaels$$ Corporation's income statement below to compute the$$ firm's earnings after taxes and earnings available for common stockholders under condition $($a$).($Round to the nearest$$ dollar.$)$

EBIT

$

$50,000$

Less: Interest expense

$12,000$

Earnings before taxes

$

$38,000$

Less: Taxes $(21\%)$

$7,980$

Earnings after taxes

$

$30,020$

Less: Preferred dividends

$0$

Earnings available for common stockholders

$

$30,020$

Part $2$

b$.$ Complete the fragment of Michaels$$ Corporation's income statement below to compute the$$ firm's earnings after taxes and earnings available for common stockholders under condition $($b$).($Round to the nearest$$ dollar.$)$

EBIT

$

$50,000$

Less: Interest expense

$12,000$

Earnings before taxes

$

$38,000$

Less: Taxes $(21\%)$

$7,980$

Earnings after taxes

$

$30,020$

Less: Preferred dividends

$12,000$

Earnings available for common stockholders

$

$18,020$