Income statement presentation; unusual items
Response to the following problem:
The preliminary 2016 income statement of Alexian Systems, Inc., is presented below:
ALEXIAN SYSTEME,INC.
Income Statement
For the Year Ended December 31, 2016
($ in millions, except earnings per share)
Revenues and gains:
Net sales $ 425
Interest 3
Other income 126
Total revenues and gains 554
Expenses:
Cost of goods sold 270
Selling and administrative 154
Income taxes 52
Total expenses 476
Net Income $ 78
Earnings per share $3.90
Additional Information:
1. Selling and administrative expenses include $26 million in restructuring costs.
2. Included in other income is $120 million in income from a discontinued operation. This consists of $90 million in operating income and a $30 million gain on disposal. 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 2015's ending inventory. The amount is material.
Required:
For each of the three additional facts listed in the additional information, discuss the appropriate presentation of the item described. Do not prepare a revised statement.