Netflix Inc. has reported the following for the year ending December 31, 2023:

• Sales Revenue: $40,000,000
• Cost of Goods Sold: $25,000,000
• Operating Expenses: $10,000,000
• Interest Expense: $2,000,000
• Income Tax Expense: $1,800,000
• Dividends Paid: $2,200,000
• Beginning Retained Earnings: $7,000,000

Requirements:

1. Compile an income statement.
2. Calculate the operating profit.
3. Prepare a statement of retained earnings.
4. Determine the earnings per share with 55,000 shares outstanding.
5. Assess the impact of a 5% increase in sales revenue on net income.