Summary Business Accounting

Question:

Refer to the situation described in BE 4–1. Prepare a multiple-step income statement for 2013. Ignore

EPS disclosures.



Answer:




PACIFIC SCIENTIFIC CORPORATION

Income Statement

For the Year Ended December 31, 2013

($ in millions)

Sales revenue ........................................................................... $2,106

Cost of goods sold ................................................................... 1,240

Gross profit ............................................................................. 866



Operating expenses:

Selling................................................................................... $126

General and administrative.................................................... 105

Total operating expenses ................................................... 231

Operating income .................................................................... 635



Other income (expense):

Gain on sale of investments .................................................. 45

Interest expense .................................................................... (35)

Total other income, net ...................................................... 10