SCEU WUURILL JUL Green Caterpillar Garden Supplies Inc.'s income statement reports data for its first year of operation. The 25% next year 1. Green Caterpillar 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) 2. The company's operating costs (excluding depreciation and amortization) remain at 60% of net sales, and its depreciation and amortization expenses remain constant from year to year. 3. The company's tax rate remains constant at 25% of its pre-tax income or earnings before taxes (EBT). 4. In Year 2, Green Caterpillar expects to pay $100,000 and $1,759,500 of preferred and common stock dividends, respectively Complete the Year 2 income statement data for Green Caterpillar, then answer the questions that follow. Be sure to round each dollar value to the nearest whole dollar You bols Green Caterpillar Garden Supplies Inc. Income Statement for Year Ending December 31 Complete the Year 2 income statement data for Green Caterpillar, then answer the questions that follow. Be sure to round each dollar value to the nearest whole dollar. Green Caterpillar Garden Supplies Inc. Income Statement for Year Ending December 31 Net sales Less: Operating costs, except depredation and amortization Less! Depreciation and amortization expenses Operating income (or EBIT) Less Interest expense Pre-tax income (or EBT) Less: Taxes (25%) Earnings after taxes Less: Preferred stock dividends Earnings available to common shareholders Less: Common stock dividends Contribution to retained earnings YOU Year 1 $15,000,000 9,000,000 600,000 $5,400,000 540,000 4,860,000 1,215,000 $3,645,000 100,000 3,545,000 1.458,000 $2,087,000 Year 2 (Forecasted) $10.750.000 9,000,000 X 600,000 55.400,000 810,000 4,050,000 1.012,500 $3,037.500 100.000 2.937.500 X Cools troductory $2,539,250 Points: 0.27 Tirm's retained earnings account Given the results of the previous income statement calculations, complete the following statements: In Year 2, if Green Caterpillar has 5,000 shares of preferred stock issued and outstanding, then each preferred share should expect to receive Xin annual dividends. . If Green Caterpillar has 400,000 shares of common stock issued and outstanding, then the firm's earnings per share (EPS) is expected to change from Xin Year 1 to Xin Year 2 X in Year 1 to Green Caterpillar's earnings before interest, taxes, depreciation and amortization (EBITDA) value changed from Xin Year 2 . It is X 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, $2,087,000 and $2,539,250, respectively. This is because REA X of the items reported in the income statement involve payments and receipts of cash. Points: 0/1
