Prepare income statement to obtain operating income

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Reference no: EM132523431

ABC Ltd. reported the following income statement and balance sheet related information in 2019. The firm is subject to 30% statutory tax rate.

2019 income statement (in millions of dollars)

Sales                                                                              4280

Operating Expenses to Generate Sales                                 -2805

Loss from Real estate partnership                                         -170

Loss from Asset impairment                                                 -100

Interest Income                                                                  90

Interest Expense                                                             -300

                                                                                     995

Income Tax Expense                                                           270

Net Income                                                                    725

2019 Balance sheet information (in millions of dollars)

Accounts Payable                                                           1,800

Trade Receivable                                                            1,290

Common Equity                                                              1,668

Property Plant and Equipment                                           4,351

Accrued Expenses                                                         1,320

Cash Equivalents                                                            753

Deferred tax liability                                                      1,120

Working Cash                                                                   65

Preferred Stock                                                               750

Inventory                                                                    4,314

Financing debt                                                               4,320

Debt securities                                                                 500

Required:

Question a) Reformulate the income statement to obtain 'Operating income from sales after tax'

Question b) Produce a reformulated balance sheet using the above balance sheet information.

Reference no: EM132523431

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