QRS Corporation's Financial Overview for the Year Ending December 31, 2023:

• Sales Revenue: $1,000,000
• Cost of Goods Sold: $600,000
• General and Administrative Expenses: $200,000
• Interest Expense: $20,000
• Income Tax Expense: $50,000
• Dividends Paid: $55,000
• Beginning Retained Earnings: $200,000

Instructions:

1. Formulate an income statement.
2. Formulate a statement of retained earnings.
3. Compute the earnings per share if there are 50,000 shares outstanding.
4. Assess the impact of a 5% increase in sales revenue on net income.
5. Discuss the financial consequences of increasing dividends by 10% on the company's retained earnings.

DEF Company has provided the following financial information:

• Beginning Inventory: $25,000
• Purchases: $100,000
• Ending Inventory: $20,000
• Sales Revenue: $150,000
• Sales Returns and Allowances: $5,000
• Sales Discounts: $3,000
• Operating Expenses: $30,000

Requirements:

1. Prepare the cost of goods sold statement.
2. Calculate the gross profit.
3. Prepare the income statement.
4. Compute the operating profit margin.
5. Discuss how inventory management could impact the company's profitability.