FINANCIAL ACCOUNTING
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ISBN: 9781259964947
Author: Libby
Publisher: MCG
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The preliminary 2018 income statement of Alexian Systems, Inc., is presented below:
ALEXIAN SYSTEMS, INC.
Income Statement
For the Year Ended December 31, 2018
($ in millions, except earnings per share)
Revenues and gains:
Net sales $ 425
Interest 3
Other income 126
Total revenues and gains 554
Expenses:
Cost of goods sold 270
Selling and administrative 154
Income taxes 52
Total expenses 476
Net Income $ 78
Earnings per share $3.90
Additional Information:
1. Selling and administrative expenses include $26 million in restructuring costs.
2. Included in other income is $120 million in income from a discontinued operation. This consists of $90 million in operating income and a $30 million gain on disposal. The remaining $6 million is from the gain on
sale of investments.
3. Cost of goods sold was increased by $5 million to correct an error in the calculation of 2017’s ending inventory. The amount is material.
Required:
For each of the three additional facts listed in the additional information, discuss the appropriate presentation of
the item described. Do not prepare a revised statement.
[This is a variation of the previous problem focusing on income statement presentation.]
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