(Profitability analysis)

Last year the P. M. Postem Corporation had sales of $421,000, with a cost of goods sold of $114,000. The firm's operating expenses were $129,000, and its increase in retained earnings was $79,840. There are currently 22,000 shares of common stock outstanding, the firm pays a $1.63 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.

Cost of Goods Sold

Gross Profit $

Operating Expenses

Net Operating Income $

Interest Expense

Earnings before Taxes $

Income Taxes

Net Income $