Data for DEF Enterprises:

Description	Amount
Gross Sales	$600,000
Sales Returns	$25,000
Net Sales	$575,000
Cost of Goods Sold	$300,000
Operating Expenses	$120,000
Administrative Expenses	$30,000
Interest Expense	$8,000
Tax Rate	27%

Requirements:

1. Prepare an income statement.
2. Calculate the gross profit margin.
3. Determine the amount of taxes paid.
4. Assess the impact of a 20% increase in administrative expenses on net income.
5. Discuss the role of interest expense in determining profitability.