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Most people know Hewlett Packard Company (HP) as a leading supplier of personal computers, printers and scanners, and storage and networking products for large and
Most people know Hewlett Packard Company (HP) as a leading supplier of personal computers, printers and scanners, and storage and networking products for large and small customers alike. However, HP also is a major provider of technology consulting, outsourcing, and services to business, educational, and government organizations. Finally, HP also provides financing for products and services to its larger customers. As a consequence, its income statement shows three sources of operating revenues (goods/services/financing) and three related costs of goods/services/financing provided to customers. Presented below are the items adapted from its recent income statement for the year ended October 31 (in millions, except per share amounts). Net eamings per share was $3.91 and the weighted-average shares used in the computation was 2,449. Acquisition-related charges Amortization of purchased intangible assets Cost of financing Cost of products Cost of services Financing income Interest expense $ 423 Product sales 1,614 Provision for taxes 432 Research and development 65,194 Restructuring charges 30,720 Selling, general and administrative 678 Service sales 635 S 86.099 2,473 3,089 1.274 12.848 41.466 Required: 1. Recognizing that HP has three sources of operating revenues, prepare a classified income statement. (Hint: The term "charge" is a synonym for expense.") (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) HEWLETT PACKARD COMPANY Consolidated Statement of Income (In millions) Net sales: Total net revenue Cost of sales
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