$($Analyzing profitability and capital structure$)$ In the year just ended, Callaway Lighting had sales of $$5,350,000$ and incurred cost of goods sold equal to $$4,530,000.$ The firm's operating expenses were $$126,000$ and its increase in retained earnings was $$43,000$ for the year. There are currently $105,000$ common stock shares outstanding and the firm pays a $$4\mathrm{.}127$ dividend per share. The firm has $$1,110,000$ in interest$-$bearing debt on which it pays $8\mathrm{.}2$ percent interest.

a$.$ Assuming the firm's earnings are taxed at $21$ percent, construct the firm's income statement.

b$.$ Calculate the firm's operating profit margin and net profit margin.

c$.$ Compute the times interest earned ratio. What does this ratio tell you about Callaway's ability to pay its interest expense?

d$.$ What is the firm's return on equity?

a$.$ Assuming the firm's earnings are taxed at $21\%,$ construct the firm's income statement.

Complete the income statement below: $($Round to the nearest dollar.$)$

Income Statement

Revenues

Cost of Goods Sold

Gross Profit

Operating Expenses

Net Operating Income

Interest Expense

Earnings before Taxes

Income Taxes

Net Income