Question
Income statement data for Whirlpool Industries from the company's 2016 financial statements follow. Use these data to reformulate the income statement for 2014, 2015,
Income statement data for Whirlpool Industries from the company's 2016 financial statements follow. Use these data to reformulate the income statement for 2014, 2015, ar 2016 under the assumption that warranty expense is a constant percentage of revenue across all three years. Specifically, compute the adjustments to: warranty expense, income tax expense, and net income. The company's tax rate is 30%. 12 Months Ended ($ millions) Dec. 31, 2016 Dec. 31, 2015 Dec. 31, 2014 Net sales $22,446 $21,427 $22,273 281 Warranty expense 525 287 Compute the average warranty expense to net sales rate over the past three years. Using your rounded answer, compute the adjusted warranty expense for each year.
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