The adjusted trial balance of Pacific Scientific Corporation on December 31, 201

Question

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, $2,140; cost of goods sold, $1,320; selling expenses, $155; general and administrative expenses, $145; interest expense, $55; and gain on sale of investments, $95. Income tax expense has not yet been recorded. The income tax rate is 35%. Prepare a multiple-step income statement for 2018. lgnore 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

Explanation / Answer

Multistep income statement :

Sales 2140 Less:Cost of goods sold (1320) Gross profit 820 Less; Operating expense Selling expense (155) General and administrative expense (145) Total operating expense (300) Operating income 520 Other revenue Gain on sale of investment 95 Other expense Interest expense (55) 40 Income before tax 560 Income tax (196) Net income 364

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