Adventure Bikes Ltd. manufactures and sells 5 different models of adventure bikes. Adventure Bikes is contemplating a 5% price cut across all 5 models. It expects the price cut to result in a 9% increase in the number of units sold for models E501, E503, and E505. The other two models (E502 and E504) are expected to see a 5% increase in sales volume. Assess the impact of the price cut on Adventure Bikes’ profits and prepare the retained earnings statement.

Model	Sales Price	Variable Costs	Sales Volume
E501	$95	$45	1,000
E502	$105	$50	1,500
E503	$115	$55	2,000
E504	$125	$60	2,500
E505	$135	$65	3,000