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Determine underlying earnings by adjusting the income statement below for non-recurring items and accounting changes. Assume a tax rate of 40 percent. Net sales $11,900
Determine underlying earnings by adjusting the income statement below for non-recurring items and accounting changes. Assume a tax rate of 40 percent.
Net sales | $11,900 |
Expenses: | |
Cost of products sold | $3,525 |
Marketing, selling, and administrative | 3,075 |
Advertising and product promotions | 1,425 |
Research and development | 1,080 |
Provision for restructuring | 700 |
Other | (30) |
Total costs and expenses | $9,775 |
Earnings before continuous operations before income taxes | $2,125 |
Provision for income taxes | 850 |
Earnings from continuous operations | $1,275 |
Discontinued operations: | |
Earnings (net) | $30 |
Gain on disposal (net) | 590 |
Discontinued operations-total | $620 |
Earnings before cumulative effect of accounting change | $1,895 |
Cumulative effect of accounting change (net) | (300) |
Net income (loss) | $1,595 |
Question 1 options:
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A -$1,555
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B -$1,095
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C -$1,695
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D- $1,975
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