Problem 4 5 (Algo) Income statement presentation Restructuring costs Discontinued operations Accounting error LO4 1, 4 3, 4 4, 4 5 The preliminary 2021 income statement of Alexian Systems, Inc , is presented below ALEXIAN SYSTEMS, INC Income Statement For the Year Ended December 31, 2021 ($ in millions, except earnings per share) Revenues and gains Sales revenue $ 490 Interest revenue 14 Other income 136 Total revenues and gains 640 Expenses Cost of goods sold 280 Selling and administrative expense 164 Income tax expense 49 Total expenses 493 Net Income $ 147 Earnings per share $ 14 70 Additional information Selling and administrative expense includes $36 million in restructuring costs Included in other income is $130 million in income from a discontinued operation This consists of $90 million in operating income and a $40 million gain on disposal The remaining $6 million is from the gain on sale of investments Cost of Goods Sold in 2021 was increased by $10 million to correct an error in the calculation of 2020's ending inventory The amount is material Required Prepare a revised income statement for 2021 reflecting the additional facts Use a multiple step format Assume that an income tax rate of 25 applies to all income statement items, and that 10 million shares of common stock were outstanding throughout the year (Enter your answers in millions rounded to 2 decimal places Round EPS answers to 2 decimal places )

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 11, 2024

Problem 4-5 (Algo) Income statement presentation; Restructuring costs; Discontinued operations; Accounting error [LO4-1, 4-3, 4-4, 4-5] The preliminary 2021 income statement of Alexian Systems, Inc.,

Problem 4-5 (Algo) Income statement presentation; Restructuring costs; Discontinued operations; Accounting error [LO4-1, 4-3, 4-4, 4-5]

The preliminary 2021 income statement of Alexian Systems, Inc., is presented below:

ALEXIAN SYSTEMS, INC. Income Statement For the Year Ended December 31, 2021 ($ in millions, except earnings per share)
Revenues and gains:
Sales revenue	$	490
Interest revenue		14
Other income		136
Total revenues and gains		640
Expenses:
Cost of goods sold		280
Selling and administrative expense		164
Income tax expense		49
Total expenses		493
Net Income	$	147
Earnings per share	$	14.70

Additional information:

Selling and administrative expense includes $36 million in restructuring costs.
Included in other income is $130 million in income from a discontinued operation. This consists of $90 million in operating income and a $40 million gain on disposal. The remaining $6 million is from the gain on sale of investments.
Cost of Goods Sold in 2021 was increased by $10 million to correct an error in the calculation of 2020's ending inventory. The amount is material.

Required: Prepare a revised income statement for 2021 reflecting the additional facts. Use a multiple-step format. Assume that an income tax rate of 25% applies to all income statement items, and that 10 million shares of common stock were outstanding throughout the year. (Enter your answers in millions rounded to 2 decimal places. Round EPS answers to 2 decimal places.)