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Data for STU Enterprises: Total Revenue : $1,200,000 Sales Discounts : $25,000 Returns and Allowances : $20,000 Net Sales : $1,155,000 Cost of Goods Sold
Data for STU Enterprises:
- Total Revenue: $1,200,000
- Sales Discounts: $25,000
- Returns and Allowances: $20,000
- Net Sales: $1,155,000
- Cost of Goods Sold: $600,000
- Operating Expenses: $300,000
- Interest Expense: $15,000
- Tax Rate: 30%
Requirements:
- Prepare an income statement.
- Calculate the net profit margin.
- Determine the amount of taxes paid.
- Analyze how a 5% increase in cost of goods sold would affect net income.
- Discuss the role of interest expense in profitability.
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