Question:
The preliminary 2013 income statement of Alexian Systems, Inc., is presented below:
Additional Information:
1. Selling and administrative expenses include $26 million in restructuring costs.
2. Included in other income is an extraordinary gain of $120 million. The remaining $6 million is from
the gain on sale of investments.
3. Cost of goods sold was increased by $5 million to correct an error in the calculation of 2012’s ending
inventory.
The amount is material.
Required:
For each of the three additional facts listed above, discuss the appropriate presentation of the item
described. Do not prepare a revised statement.
Answer:
The preliminary 2013 income statement of Alexian Systems, Inc., is presented below:
Additional Information:
1. Selling and administrative expenses include $26 million in restructuring costs.
2. Included in other income is an extraordinary gain of $120 million. The remaining $6 million is from
the gain on sale of investments.
3. Cost of goods sold was increased by $5 million to correct an error in the calculation of 2012’s ending
inventory.
The amount is material.
Required:
For each of the three additional facts listed above, discuss the appropriate presentation of the item
described. Do not prepare a revised statement.
Answer:
