PQR Ltd. Figures

Beginning Inventory	$50,000
Net Purchases	$140,000
Ending Inventory	$60,000
Sales Revenue	$220,000
Operating Expenses	$35,000

1. Compute the Cost of Goods Sold.
2. Prepare the income statement.
3. Calculate the gross profit and gross profit margin.
4. Calculate the operating profit margin.
5. Discuss how effective cost control can enhance gross and operating profit margins.