Last year the P. M. Postem Corporation had sales of $400,000, with a cost of goods sold of $112,000. The firm's operating expenses were $128,000, and its increase in retained earnings was $71,240. There are currently 21,000 shares of common stock outstanding, the firm pays a $1.56 dividend per share, and the firm has no interest-bearing debt. 

 

a.??Assuming the? firm's earnings are taxed at 35 percent, construct the? firm's income statement.

b. Compute the? firm's operating profit margin.

Income Statement

 

 

Revenues

$

 

Cost of Goods Sold

 

 

Gross Profit

$

 

Operating Expenses

 

 

Net Operating Income

$

 

Interest Expense

 

 

Earnings before Taxes

$

 

Income Taxes

 

 

Net Income