The income statement, also known as the profit and loss ( PSI) statement, provides a snapshot of the financial performance of a company during a spexified period of time. It reports a firm's 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 firm's revenues and expenses to the perilod in which they were incurred, not necessarily when cash was received or paid. Investors and analysts use the information given in the income statemient and other financial statements and reports to evaluate the company's financial performance and condition. Consider the following scenario: Cute Camel Woodcraft Compary's income statement reports data for its first year of operation. The firm's CFO would like sales to increase by 25% nest year. 1. Cute Camel 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 eompany's operatipe costs (excluding depreciation and amortization) remain at 70 s of net sales, and ies depreciation and amortization axpensos remain constant from year to vear. 3. The companvis tax fate remaina constant at 2545 of its pre-tax income or carnings before taxes (EeT). 4. In Year 2, Cute canel expects to pay $200,000 and $1,251,375 of preferred and cominon stock clividends, respectivelv. whiole doolas. Givon the results of the previous income statement calculations, complete the following statements: - In year 2, if cute Camel has 5,000 shares of preferred stock, assued and outstanding. then each preferred share should expect to recelve in annual dividends. - If Cute Camel has 400,000 shares of common stock lssued and outstanding. then the firm's earnings per strare (EpS) is expected to change from in Year 1 to in Year 2. - Cute Camel's earnings before interest, taxes, debreciabion and amortization (Eerroa) value changed from In Year 2 to In Year 2. to sav that Cute Comel's not infiows and oublows of cash at the end of Years 1 and 2 are equal to the companvis annual contrbubbn to retalped earnings, $2,257,000 and $2,769,875, cespectively. This is because of the items reported in the income tratement icwolve payments and receipts of cash