The preliminary 2018 income statement of Alexian Systems, Inc. is presented belo

Question

The preliminary 2018 income statement of Alexian Systems, Inc. is presented below 13 he Year Ended December 31, 2018 4.16 points Revenues and gains: 432 10 133 575 Net sales Interest Other income Print Total revenues and gains Cost of goods sold Income taxes Expenses: 277 Seiling and administrative158 42 Total expenses Net Income 6 98 Earnings per share 3.50 Addltlonal Information: 1. Selling and administrative expenses include $33 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 $13 million is from the gain on sale of investments 3 Cost of goods sold was increased by $10 million to correct an error in the calculation of 2017's ending inventory. The amount is material. Required: Prepare a revised income statement for 2018 reflecting the additional facts. Use a multiple-step format. Assume that an income tax rate of 30% applies to all income statement items, and that 28 million shares of co mon stock were outstanding throughout the year. Enter your answers In millions except eornings per share. Round EPS answers to 2 declmal places.) ALEXIAN SYSTEMS ING ?Prev 13 of 24111 Next >

Explanation / Answer

Alexian System Income statement For the year ended december 31 Amount Amount Net sales revenue 432 Cost of goods sold (277-10) 267 Gross profit 165 Operating expenses Selling and administrative expenses(153-33) 125 Restructuring cost 33 Total operaing expenses 158 Operating income 7 Other income: Interest revenue 10 gain on sale of investment 13 Total other income 23 Income from continuing operations before tax 30 Income taxes(30*30%) 9 Income from continuing operations 21 Discotinued operations Income from operations of discontinued component 120 Income tax expenses (120*30%) 36 income on discontinued operations 84 Net income 105 Earnings per share Income from continuing operations (21/28) 0.75 Discontinued operations (84/28) 3 Net income 3.75 Difference in net income (105-98) 7 millions is due to the over statement of the inventory by 10 millions less tax@30%

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