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

• Sales Revenue: $1,000,000
• Cost of Goods Sold: $600,000
• Operating Expenses: $150,000
• Interest Expense: $20,000
• Income Tax Expense: $35,000
• Dividends Paid: $70,000
• Beginning Retained Earnings: $180,000

Requirements:

1. Prepare an income statement.
2. Draft a statement of retained earnings.
3. Calculate the earnings per share if there are 50,000 shares outstanding.
4. Assess the impact of a 20% reduction in operating expenses on net income.
5. Discuss the effects of increasing the income tax expense by 10% on the company's financial statements.