The income statement, also known as the profit and loss (PsL) statement, provides a snapshot of the financial performance of a company during a specified peried of time. It reports a firm's gross income, expenses, net income, and the income that is avallable for distribution to its preferred and common shareholders: The income statement is prepared using the generally accepted accounting principles [GAAP) that match the fim's revenues and expenses to the peried in which they were incurred, not necessariy when cash was recelved or pald. Investors and analysts use the information given in the income statement and other financial statements and reports to evaluate the company's financiat performance and condition. Consider the folswing scenario: Bue Hamster Manufacturing inc.'s income statement reports data for its first year of operation, The firm's CEO would like sales to increase by 25 \% next year. 1. Gibil Hamster is able to achieve this level of increased sales, but its interest costs increase trom 10% to 15% of earnings before interest and tawes (cEIT). 2. The company's operating costs (excluding depreciation and amortization) remain at 65% of net sales; and its depreciation and amortization expenses remain coratant from year to year. 3. The company's tax rate remaiss constant at 25% of its pre-tax income or earnings before taxes (EaT). 4. In Year 2, Blue Hamster expects to pay $200,000 and $2,280,656 of preferred and common stock dividends, respectively. Complete the Year 2 income statement data for Blue Hamster, then answer the questions that follow, Be sure to round each dollar value to the nearest: whoie collar. Blue Hamster Manufacturing Inc. Income Statemant for Yaar Endina Dacambar 31 Given the results of the previous income statement calculations, complete the following statements: - In Year 2, if Elue Hamster has 5,000 shares of preferred stock issued and outstanding, then each preferred share should expect to receive in annual dividends. - If Bive Hamster has 400,000 sthares 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 - Blue Hamster's earnings before interest, taxes, depreciation and amortization (EBITDA) value changed from in Year 1 to in Year 2 . - It is to say that Blue Hamster's net inflows and outfiows of cash at the end of Years 1 and 2 are equal to the company's annual contribution to retained earnings, $4,194,250 and $5,121,531, respectively. This is because satement imvolve payments and recelpts of cash. of the items reported in the income Continue without saving