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Net sales Less: Operating costs, except depreciation 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 Green Caterpillar Garden Supplies Inc. Income Statement for Year Ending December 31 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 Given the results of the previous income statement calculations, complete the following statements: Year 2 (Forecasted) $18,750,000 11,250,000 • Green Caterpillar's earnings before interest, taxes, depreciation and amortization (EBITDA) value changed from in Year 2. 600,000 • It is $6,900,000 1,035,000 5,865,000 1,466,250 $4,398,750 100,000 4,298,750 1,759,500 • In Year 2, if Green Caterpillar has 5,000 shares of preferred stock issued and outstanding, then each preferred share should expect to receive in annual dividends. $2,539,250 • 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 in Year 1 to in Year 2. in Year 1 to 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 of the items reported in the income statement involve payments and receipts of cash.

Net sales Less: Operating costs, except depreciation 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 Green Caterpillar Garden Supplies Inc. Income Statement for Year Ending December 31 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 Given the results of the previous income statement calculations, complete the following statements: Year 2 (Forecasted) $18,750,000 11,250,000 • Green Caterpillar's earnings before interest, taxes, depreciation and amortization (EBITDA) value changed from in Year 2. 600,000 • It is $6,900,000 1,035,000 5,865,000 1,466,250 $4,398,750 100,000 4,298,750 1,759,500 • In Year 2, if Green Caterpillar has 5,000 shares of preferred stock issued and outstanding, then each preferred share should expect to receive in annual dividends. $2,539,250 • 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 in Year 1 to in Year 2. in Year 1 to 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 of the items reported in the income statement involve payments and receipts of cash.

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 20BEA: The income statement, statement of retained earnings, and balance sheet for Somerville Company are...
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Net sales Less: Operating costs, except depreciation 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 Green Caterpillar Garden Supplies Inc. Income Statement for Year Ending December 31 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 Given the results of the previous income statement calculations, complete the following statements: . It is Year 2 (Forecasted) $18,750,000 11,250,000 • Green Caterpillar's earnings before interest, taxes, depreciation and amortization (EBITDA) value changed from in Year 2. 600,000 $6,900,000 1,035,000 5,865,000 1,466,250 $4,398,750 100,000 4,298,750 1,759,500 • In Year 2, if Green Caterpillar has 5,000 shares of preferred stock issued and outstanding, then each preferred share should expect to receive in annual dividends. $2,539,250 • 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 in Year 1 to in Year 2. in Year 1 to 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 of the items reported in the income statement involve payments and receipts of cash.
Transcribed Image Text:Net sales Less: Operating costs, except depreciation 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 Green Caterpillar Garden Supplies Inc. Income Statement for Year Ending December 31 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 Given the results of the previous income statement calculations, complete the following statements: . It is Year 2 (Forecasted) $18,750,000 11,250,000 • Green Caterpillar's earnings before interest, taxes, depreciation and amortization (EBITDA) value changed from in Year 2. 600,000 $6,900,000 1,035,000 5,865,000 1,466,250 $4,398,750 100,000 4,298,750 1,759,500 • In Year 2, if Green Caterpillar has 5,000 shares of preferred stock issued and outstanding, then each preferred share should expect to receive in annual dividends. $2,539,250 • 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 in Year 1 to in Year 2. in Year 1 to 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 of the items reported in the income statement involve payments and receipts of cash.
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