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The following information is available for DEF Company: Beginning Inventory: $25,000 Purchases: $100,000 Ending Inventory: $20,000 Sales Revenue: $150,000 Sales Returns and Allowances: $5,000 Sales
The following information is available for DEF Company:
- 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:
- Prepare the cost of goods sold statement.
- Calculate the gross profit.
- Prepare the income statement.
- Compute the operating profit margin.
- Discuss how inventory management could impact the company's profitability.
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