How are the resistor values R1 and R2 calculated for a transistor amplifier that has a voltage divider bias
What you see has nothing to do with the values of the resistors !
What you see is the behavior you get when you severely overdrive the input. You are applying way too much input signal to this circuit.

Is that 10 V peak you're putting in ? Geez, the supply is only 9 V.
If you want low distortion then the output swing can only be 2 Vpeak or so.

Stay below 1 Vpeak-peak at the input and it should work properly. 

If your goal is to design your own audio amp. you have a very long way to go. You will need to understand how this circuit works, understand why changing the resistors would not help and much much more. Designing a circuit is not putting something in a simulator and hoping for the best. Designing something required knowledge and practice.

Update: Oops, my mistake, forgot to consider that CE of 100 uF, this will increase the gain. IF THE CIRCUIT WAS DIMENSIONED PROPERLY which it is not. This amplifier is wrongly biased, RC is too high driving the transistor into saturation. 

This explains why you get the distorted output !

You will need to study a bit more to learn how to bias a transistor properly.