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

Item	Amount
Sales Revenue	$250,000
Cost of Goods Sold	$150,000
Operating Expenses	$45,000
Interest Expense	$7,000
Income Tax Expense	$12,000
Dividends Paid	$10,000
Beginning Retained Earnings	$40,000

Requirements:

1. Create an income statement.
2. Prepare a statement of retained earnings.
3. Calculate the earnings per share if there are 12,000 shares outstanding.
4. Assess the impact of a 15% increase in operating expenses on net income.
5. Discuss the potential consequences of reducing dividends by 25% on the company’s financial health.