The following information is available for MNO Enterprises:

• Opening Inventory: $60,000
• Purchases: $200,000
• Closing Inventory: $50,000
• Total Sales: $300,000
• Returns and Allowances: $20,000
• Discounts Allowed: $8,000
• Operating Expenses: $70,000

Requirements:

1. Compute the cost of goods sold.
2. Calculate the gross profit.
3. Prepare the income statement.
4. Determine the operating profit margin.
5. Analyze the impact of returns and allowances on the revenue.