JKL Company provided the following data:

• Total Sales: $300,000
• Sales Returns and Allowances: $20,000
• Net Sales: $280,000
• Cost of Goods Sold: $150,000
• Operating Expenses: $50,000
• Interest Expense: $4,000
• Tax Rate: 30%

Requirements:

1. Prepare an income statement.
2. Calculate the net profit margin.
3. Determine the amount of taxes paid.
4. Analyze how a 5% increase in operating expenses would affect net income.
5. Discuss the impact of interest expense on profitability.