1.1 XML Limited presented the Statement of Comprehensive Income below for its most recent financial year.

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Sales743 000

Cost of sales402 000

Gross profit341 000

Operating expenses145 000

Income from operations196 000

Other income1 100

Other expenses26 000

Profit before tax171 100

Income tax60 000

Net profit111 100

1.1.1 Explain the difference between "sales" and "other income". (4)

1.1.2 XML Limited would like to earn a large gross profit by selling its products at a much higher price than its cost. Describe two factors that may prevent it from doing so. (2)

1.1.3 Explain how cost of sales, operating expenses and other expenses are different from one another. (3)

1.1.4 Explain why cost of sales, operating expenses, other expenses and income tax are listed separately in the Statement of Comprehensive Income rather than being lumped together as one item. (2)

1.1.5 Explain why the Statement of Comprehensive Income presented above is inadequate to provide a proper interpretation of the financial result of XML Limited for the financial year. (2)