Constructing an income statement
Banting Corporation (name disguised) is a major international pharmaceutical company. Listed below are items and amounts taken from the company's consolidated accounts for the year to 31 December 20x2. All amounts are in millions of US dollars. (Note that not all items listed are drawn from the income statement.)
|
Financial income, net of financial expense
|
147
|
|
Share premium
|
1,026
|
|
Cost of goods sold
|
2,392
|
|
Licence fees and other operating income
|
347
|
|
Trade receivables
|
1,553
|
|
Research and development costs
|
1,588
|
|
Sales revenue
|
9,510
|
|
Investment income
|
20
|
|
Employee costs payable
|
430
|
|
Provision for deferred tax
|
543
|
|
Sales and distribution costs
|
2,886
|
|
Administration expenses
|
746
|
|
Corporate income tax
|
866
|
|
Work-in-progress
|
1,072
|
Required
(a) Prepare a multiple-step income statement for Banting Corporation for calendar year 20x2, showing separately gross profit, operating profit, profit before tax and net profit.
(b) Comment on Banting Corporation's cost structure in 20x2. What is unusual about it?