For the year ending December 31, 2023, DEF Inc. reported the following:

Financial Information	Amount
Sales Revenue	$500,000
Cost of Goods Sold	$300,000
Operating Expenses	$90,000
Interest Expense	$8,000
Income Tax Expense	$20,000
Dividends Paid	$25,000
Beginning Retained Earnings	$100,000

Requirements:

1. Construct an income statement.
2. Prepare a statement of retained earnings.
3. Compute the earnings per share if there are 20,000 shares outstanding.
4. Evaluate the impact of a 20% decrease in cost of goods sold on net income.
5. Analyze the effect of increasing interest expenses by 5% on net income.