Nazir Khan, the CEO of Peshawar Inc., signed an employment contract with the company that allowed him to earn a bonus if he increased Peshawar's gross profit margin by more than 3%. The draft income statement for 2018 has just been prepared and is shown below. Net sales Cost of goods sold Gross profit Operating expenses Income from operations Income tax expense Net income Gross profit margin 2018 $123,255 2017 $92,000 59,698 840 63,557 44,160 21,605 9,200 41,952 34,960 12,586 10,488 $29,366 $24,472 51.6% 48.0% The board of directors is about to meet and determine if Nazir is to be awarded his bonus. As one of the board members, you are surprised to receive an anonymous letter, supposedly from a member of the accounting department, that indicates that the CEO asked the staff member to do the following during 2018: 1. Record purchase returns of $7,130 as an increase of sales revenue. 2. Record freight of $4,840 paid on purchases of merchandise as an operating expense. 3. Record sales returns of $5,725 as an operating expense. Assuming the staff member is right, correct the above adjustments and recalculate the gross profit margin. (Round answers to 1 decimal place, e.g. 15.2.) Gross profit margin draft Gross profit margin revised Is the CEO is eligible for his bonus? % % Is the CEO is eligible for his bonus? Did the adjustments requested by the CEO affect the profit margin? (Round answers to 1 decimal place, e.g. 15.2.) from the prior year. However, in the first draft of the income % determined using the correct amounts. the profit margin in 2018 is % which is statement, the profit margin was %, which is than the Based on the above, was any harm done to any users of the financial statements because of the adjustments made