The income statement, also known as a profit and loss $($P&L$)$ statement, provides a snapshot of a companys financial performance during a specified period of time. It reports a firms gross income, expenses, net income, and the income that is available for distribution to its preferred and common shareholders.The income statement is prepared using the generally accepted accounting principles $($GAAP$)$ that match the firms revenues and expenses to the period in which they are incurred, not necessarily when cash is received or paid. Investors and analysts use the information presented in the income statement, and the other financial statements and reports, to evaluate the companys financial performance and condition.Consider the following scenario:Green Caterpillar Garden Supplies Inc.s income statement reports data for its first year of operation. The firms CEO would like sales to increase by $25\%$ next year$\mathrm{.}1.$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 taxe s $($EBIT$)\mathrm{.}2.$The companys operating costs $($excluding depreciation and amortization$)$ remain at $65\mathrm{.}00\%$ of net sales, and its depreciation and amortization expenses remain constant from year to year$\mathrm{.}3.$The companys tax rate remains constant at $40\%$ of its pre$-$tax income or earnings before taxes $($EBT$)\mathrm{.}4.$In Year $2,$ Green Caterpillar expects to pay $$100,000$ and $$1,419,075$ of preferred and common stock dividends, respectively.$-$In Year $2,$ if Green Caterpillar has $10,000$ shares of preferred stock issued and outstanding, then each preferred share should expect to receive a$\mathrm{.}10$ b$\mathrm{.}15$ c$\mathrm{.}20.$ d$\mathrm{.}25$ in annual dividends.If Green Caterpillar has $500,000$ shares of common stock issued and outstanding, then the firms earnings per share $($EPS$)$ is expected to change from a$\mathrm{.}6\mathrm{.}70$ b$\mathrm{.}6\mathrm{.}50$ c$\mathrm{.}11\mathrm{.}16$ d$\mathrm{.}12\mathrm{.}40$ in Year $1$ to a$\mathrm{.}8\mathrm{.}11$ b$\mathrm{.}7\mathrm{.}91$ c$\mathrm{.}13\mathrm{.}52$ d$\mathrm{.}15\mathrm{.}90$ in Year $2.$Green Caterpillars before interest, taxes, depreciation and amortization $($EBITDA$)$ value changed from a$\mathrm{.}8,432,000$ b$\mathrm{.}19,200,000$ c$\mathrm{.}9,548,000$ d$\mathrm{.}7,000,000$ in Year $1$ to a$\mathrm{.}20,304,500$ b$\mathrm{.}26,192,500$ c$\mathrm{.}8,750,000$ d$\mathrm{.}12,004,500$ in Year $2.$It is a$.$correct b$.$incorrect to say that Green Caterpillars net inflows and outflows of cash at the end of Years $1$ and $2$ are equal to the companys annual contribution to retained earnings, $$1,828,925$ and $$2,535,425,$ respectively. This is because a$.$all b$.$all but one of the items reported in the income statement involve payments and receipts of cash.

Complete the Year $2$ income statement data for Green Caterpillar, then answer the questions that follow. Round each dollar value to the nearest whole dollar.

Green Cacerpillar Garden Supplies Inc.

Income Statement for Year Ending December $31$