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DEF Enterprises provides the following financial figures: Item Amount Total Sales $600,000 Sales Returns $50,000 Net Sales $550,000 Cost of Goods Sold $250,000 Operating Expenses

DEF Enterprises provides the following financial figures:

Item

Amount

Total Sales

$600,000

Sales Returns

$50,000

Net Sales

$550,000

Cost of Goods Sold

$250,000

Operating Expenses

$100,000

Interest Expense

$8,000

Tax Rate

32%

Requirements:

  1. Construct an income statement for DEF Enterprises.
  2. Calculate the gross profit margin.
  3. Determine the net income after tax.
  4. Assess the impact of a $20,000 increase in operating expenses on net income.
  5. Analyze how sales returns affect the company’s revenue.

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