The Income statement, also known as the profit and loss (P&L) statement, provides a snapshot of the financial performance of a compa a specified period of time. It reports a firm's gross income, expenses, net income, and the income that is available for distribution to its prefer common shareholders. The income statement is prepared using the generally accepted accounting principles (GAAP) that match the firm's revenues and expenses to t period in which they were incurred, not necessarily when cash was received or pald. Investors and analysts use the information given in the In statement and other financial statements and reports to evaluate the company's finandal performance and condition. Consider the following scenarlo: Fuzzy Button Clothing Company'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. Fuzzy Button 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 65% of net sales, and its depreciation and amortization expenses remain constant from year to year. 3. The company's tax rate remains constant at 40% of its pre-tax income or earnings before taxes (EBT). 4. In Year 2, Furry Button expects to pay $300,000 and $1,824,525 of preferred and common stock dividends, respectively Complete the Year 2 income statement data for Fuzzy Button, then answer the questions that follow. Be sure to round each dollar value to the nean whole dollar Fuzzy Button Clothing Company Income Statement for Year Ending December 31 Year 1 $20,000,000 Year 2 (Forecated) 5 13,000,000 B00,000 300,000 $6,200,000 620,000 Net sales Less: Operating costs, except depreciation and amortization Less: Depreciation and amortisation expenses Operating income (or EBIT) Less: Interest expense Pre-tax income (or EB) Less: Taxes (40%) Earnings after takes Less Profi tack dividends Earning available to common sharvolders Less Common stock dividende Contribution to retained carnich $5,580,000 2.232,000 $3.348.000 300,000 $3,041,000 1.0.600 $1.541400 31,929,75 Given the results of the previous income statement calculations, complete the following statements ctory In Year 2, Ruey Button has 25.000 shares of entered stock bront and outstanding, then each ofered the should expect to receive inn diviends . Try ito na 200,000 where or common stacked and outstanding, then the tworninas per shure (UPS) is rectos to change from YM 2 . Futy Button's before interest, taves depreciation and amortation ( CDA) changed from Year 1 to in Year to say that ur lutton flows and out of cast the end of your and 2 are equal to the company's contribution to and caring 51.541.400 and $1,020.075, respectively. This is because of the spin the income statement involve payments and receipt of the