STU Enterprises Financial Snapshot for the Year Ending December 31, 2023:

• Sales Revenue: $500,000
• Cost of Goods Sold: $300,000
• Marketing Expenses: $80,000
• Interest Expense: $10,000
• Income Tax Expense: $25,000
• Dividends Paid: $30,000
• Beginning Retained Earnings: $100,000

Requirements:

1. Create an income statement.
2. Create a statement of retained earnings.
3. Compute the earnings per share if there are 25,000 shares outstanding.
4. Investigate the effect of a 20% increase in sales revenue on net income.
5. Evaluate the impact of reducing dividends by 50% on retained earnings.