Prior to Year 8, General Dynamics Corporation engaged in a wide variety of industries, including weapons manufacturing under government contracts, information technologies, commercial aircraft manufacturing, missile systems, coal mining, material service, ship management, and ship financing. During Year 8, General Dynamics sold its information technologies business. During Year 9, General Dynamics sold its commercial aircraft manufacturing business. During Year 9, it also announced its intention to sell its missile systems, coal mining, material service, ship management, and ship financing businesses. These strategic moves left General Dynamics with only its weapons manufacturing business. Financial statements for General

Dynamics for Year 9 as reported, Year 8 as restated in the Year 9 annual report for discontinued operations, and Year 8 as originally reported appear in Exhibit 6.19 (balance sheet), Exhibit 6.20 (income statement), and Exhibit 6.21 (statement of cash flows).
Required
a. Refer to the balance sheets of General Dynamics in Exhibit 6.19. Why does the restated amount for total assets for Year 8 of $4,672 million differ from the originally reported amount of $6,207 million?
b. Refer to the income statement for General Dynamics in Exhibit 6.20. Why are the originally reported and restated net income amounts for Year 8 the same (that is, $505 million) when each of the individual revenues and expenses decreased on restatement?
c. Refer to the statement of cash flows for General Dynamics in Exhibit 6.21. Why is the restated amount of cash flow from operations for Year 8 of $609 million less than the originally reported amount of $673 million?
d. If the analyst wished to analyze changes in the structure of assets and equities between Year 8 and Year 9, which columns and amounts in Exhibit 6.19 would the analyst use? Explain.
e. If the analyst wished to analyze changes in the operating profitability between Year 8 and Year 9, which columns and amounts in Exhibit 6.20 would the analyst use? Explain.
f. If the analyst wished to use cash flow ratios to assess short-term liquidity and long-term solvency risk, which columns and amounts in Exhibit 6.21 would the analyst use? Explain.

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EXHIBIT 6.18 Sapient Corporation Partial Income Statement (amounts in thousands) (Problem 6.15) Year 3 Year 2 Revenues: 173,811 9,5748,562 .w...184,795 Service Revenues Reimbursable Expenses Operating Expenses: $ 133,275 9.5748,562 Reimbursable Expenses .. . 26,192 79,338 66,885 107,430 4,328 3,161 18,501 57,523 2,135 Restructuring and Other Related Charges.......... Amortization of Intangible Assets 1,772 1,089 Total Operating Expenses Loss from Continuing Operations 202.561 429,171 . 1,902 4312 Loss Before Income Taxes 1337 (18,585) $ (7,627) (223,901) Net Loss... 7627) 230,642) EXHIBIT 6.19 General Dynamics Corporation Balance Sheet (amounts in millions) (Problem 6.16) Year 9 as Reported Year 8 as Restated in Year 9 Annual Report Year 8 as Originally Reported Assets Cash and Cash Equivalents Marketable Securities . S 513 432 64 513 307 $ 507 307 1,474 1,468 145 $4,000 372 300 $4,672 2,606 Contracts in Process.. Net Assets of Discontinued Businesses 767 329 Total Current Assets .$3,655 Property, Plant, and Equipment, net322 449 $4,319 1,029 859 $6,207 245 $4,222 Other Assets....a... Total Assets . . . Liabilities and Shareholders' Equity Accounts Payable and Accruals....S 553 Current Portion of Long-Term Debt .. $2,593 516 $ 642 450 1,174 $2,266 163 263 $2,692 S 55 25 2,651 145 $3,109 365 753 $4,227 S 55 25 2,651 (751) $1980 $6,207 38 Common Stock.... Additional Paid-In Capital 42 Treasury Stock (751) $1980 $4,672 Total Liabilities and Shareholders Equity$4,222 EXHIBIT 6.20 General Dynamics Corporation Income Statement (amounts in millions) (Problem 6.16) Year9 as Reported Annal Report Year 8 as Restated in Year 9 Year 8 as Originally Reported Continuing Operations s 3,322 (3,207) $ 8,751 (8,359) (34) (27) $ 331 43 S 374 Interest Income (Expense), net Other Expense, net 25 27 (27) $ 92 114 206 21 Discontinued Operations $ 299 s 131 374 815 Net Income S 505 $ 505