INCOME STATEMENT ASSIGNMENT Directions: Complete the following Income Statement by filling in the missing amounts (simply replace the 2272 placeholder with the correct value). After you have filled in the missing values, please answer the three questions that appear at the end of the document. Organic Grocers (a fictitious company and data) Income Statement in millions, except per share amounts) Years ended June 30, 2017 2016 2015 REVENUES Sales Other income from operations $35,005 330 35335 $34,004 585 92029 $31,001 591 31,592 OPERATING EXPENSES Salaries and employee benefits Cost of merchandise sold Purchase of store equipment Maintenance technology support for store equipment Depreciation and amortization 10.100 13,522 3,168 2,683 1382 222 9,800 13,757 1,167 1,015 1 452 27,191 9,680 11,952 2272 875 1.602 25 226 OPERATING PROFIT 4,480 ???? 6.366 OTHER INCOME Investments Interest Income Interest expense 35 46 (117 7??? (120) (65) 40 8 (118) (70) INCOME BEFORE INCOME TAXES INCOME TAX EXPENSE NET INCOME 4,408 603 2222 7,333 1589 $4,744 6.296 12495 BASIC EARNINGS PER COMMON SHARE DILUTED EARNINGS PER COMMON SHARE $3.96 $3.67 $9.02 $8.45 58.88 $8.65 Please answer the following questions: 1. Please briefly explain how you calculated the Operating Profit for 2016 (you can simply write the equation you used to calculate the number): 2. Using the information contained in the Income Statement, briefly explain why even though revenue increased from 2015 to 2016, net income actually stayed about the same. (please be sure to use numbers and information from the income statement to support your answer) 3. Imagine you are an HR professional viewing the Income Statement with a division manager. The division manager states that the decrease in net income from 2016 to 2017 was due to a large increase in employee salary and benefit expenses. Due to this, the division manager would like to lay off some employees in order to reduce costs. How would you defend against the claim that employee salary and benefits are to blame by using the information provided in the Income Statement? (please be sure to use numbers and information from the income statement to support your answer)