Analyzing and Interpreting Income Components and Disclosures The income statement for Xerox Corporation follows.

Years Ended December 31 (???? millions) 2015 2014 2013 Revenues Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,748 $ 5,288 $ 5,582 Outsourcing, maintenance and rentals . . . . . . . . . . . . . . . . . . . . 12,951 13,865 13,941 Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 346 387 483 Total Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,045 19,540 20,006 Costs and Expenses Cost of sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,961 3,269 3,550 Cost of outsourcing, maintenance, and rentals . . . . . . . . . . . . . . 9,691 9,885 9,808 Cost of financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130 140 163 Research, development and engineering expenses . . . . . . . . . . 563 577 603 Selling, administrative and general expenses . . . . . . . . . . . . . . . 3,559 3,788 4,073 Restructuring and asset impairment charges . . . . . . . . . . . . . . . 186 128 115 Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . 310 315 305 Other expenses, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233 232 146 Total costs and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,633 18,334 18,763 Income before income taxes and equity income . . . . . . . . . . . . . 412 1,206 1,243 Income (tax) benefit expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . (23) 215 253 Equity in net income of unconsolidated affiliates. . . . . . . . . . . . . 135 160 169 Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . . 570 1,151 1,159

(Loss) income from discontinued operations, net of tax . . . . . . . (78) (115) 20 Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 492 1,036 1,179 Less: net income attributable to noncontrolling interests . . . . . . 18 23 20 Net income attributable to Xerox . . . . . . . . . . . . . . . . . . . . . . . $ 474 $ 1,013 $ 1,159 Required a???? Xerox reports several sources of income. How should revenue be recognized for each of these business activities? Explain.

b???? Compute the relative size of sales revenue and of revenue from outsourcing, maintenance, and rentals.

(????int???? Scale each type of revenue by total revenue.) What observations can be made about the different sources of revenue?

c???? Xerox reports $233 million in expenses in 2015 labeled as “Other expenses, net.” How can a company use such an account to potentially obscure its actual financial performance?