second part of question 2

Exercise 1-46 (Algorithmic) Income Statement ERS Inc, maintains and repairs office equipment. ERS had an average of 10,000 shares of common stock outstanding for the year. The following income statement account balances are available for ERS at the end of 2019, Advertising expense $24,080 Depreciation expense (on service van) 16,200 Income taxes expense 15,150 Interest expense 10,100 Rent expense 58,400 11,900 Insurance expense Salaries expense (for administrative personnel) Service revenue 195,600 K 934,000 Supplies expense 66,400 Utilities expense 26,100 Wages expense (for service technicians) 448,300 Required: eBook Feedback Check My Work 1. Prepare an income statement with proper form. Start with company name, statement type, and date. Total revenue minus total expenses = net income 2. Conceptual Connection: Compute net profit margin for ERS, Round your answer to one decimal place. 6.6 % If ERS is able to increase its service revenue by $100,000, what should be the effect on future income? If ERS had an incremental increase in revenue of $100,000, based on the net profit margin computed, what is the additional potential profit? 3. Conceptual Connection: Assume that ERS net profit margin was 8.5% for 2018. As an investor, what conclusions might you draw about ERS' fu profitability? A declining profit margin implies that ERS is having difficulty maintaining control over its expenses. Feedback