Reference no: EM132662810
Problem - The preliminary 2016 income statement of Alexian Systems, Inc., is presented below:
ALEXIAN SYSTEMS, INC. Income Statement For the Year Ended December 31, 2016 ($ in millions, except earnings per share)
Revenues and gains:
Net sales $431
Interest 9
Other income 132
Total revenues and gains 572
Expenses:
Cost of goods sold 276
Selling and administrative 146
Income taxes 60
Total expenses 482
Net Income $90
Earnings per share $3.60
Additional information:
1. Selling and administrative expenses include $32 million in restructuring costs.
2. Included in other income is $125 million in income from a discontinued operation. This consists of $90 million in operating income and a $35 million gain on disposal. The remaining $7 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 2015's ending inventory. The amount is material.
Required - Prepare a revised income statement for 2016 reflecting the additional facts. Use a multiple-step format. Assume that an income tax rate of 40% applies to all income statement items, and that 25 million shares of common stock were outstanding throughout the year.