Brief Exercise 4-3 Multiple-step income statement [LO4-1, 4-3] The adjusted tria

Question

Brief Exercise 4-3 Multiple-step income statement [LO4-1, 4-3] The adjusted trial balance of Pacific Scientific Corporation on December 31, 2018, the end of the company's fiscal year, contained the following income statement items ($ in millions): sales revenue, $2,115; cost of goods sold, $1,270; selling expenses, $130; general and administrative expenses, $120; interest expense, $50; and gain on sale of investments, $70. Income tax expense has not yet been recorded. The income tax rate is 40%. Prepare a multiple-step income statement for 2018. Ignore EPS disclosures. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in millions (i.e., 10,000,000 should be entered as 10) PACIFIC SCIENTIFIC CORPORATION Income Statement For the Year Ended December 31, 2018 0

Explanation / Answer

PACIFIC SCIENTIFIC CORPORATION Income Statement For the Year Ended December 31,2018 Sales revenue 2,115 Cost of goods sold - 1,270 Gross profit 845 Operating expenses Selling expenses -130 General & administrative -120 Total operating expenses -250 Operating income 595 Other income /expense Gain on sale of investments 70 Interest expense -50 Total other income , net 20 Income before income tax 615 Income tax expense (615* 40 %) 246 Net income 369

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