Question

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	$	578
Interest revenue		21
Other income		119
Total revenues and gains		718
Expenses:
Cost of goods sold		288
Selling and administrative expense		202
Income tax expense		57
Total expenses		547
Net Income	$	171
Earnings per share	$	17.10

Additional information:

1. Selling and administrative expense includes $44 million in restructuring costs.
2. Included in other income is $110 million in income from a discontinued operation. This consists of $90 million in operating income and a $20 million gain on disposal. The remaining $9 million is from the gain on sale of investments.
3. Cost of goods sold 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.)
  

Answer 1

Income statement presents the expenses incurred & incomes earned over a particular period of time.