Instructions Indicate the deficiencies in the income stateme

Instructions Indicate the deficiencies in the income statement presented above. Assume that the corporation desires a single-step income statement. CA4-2 (Income Reporting Deficiencies) The following represents a recent income statement for Boeing Company. (S in millions) Sales Costs and expenses Income from operations Other income Interest expense Earnings before income taxes Income taxes Net income $21,924 20,773 1,151 122 130) 1,143 (287) $856 It includes only five separate numbers (two of which are in billions of dollars), two subtotals, and the net earnings figure Instructions (a) Indicate the deficiencies in the income statement (b) What recommendations would you make to Boeing to improve the usefulness of its income statement?

Solution

INCOME STATEMENT CORRECRED ($ in Millions) ($ in Millions) Sales $         21,924 Add: Othe Income $               122 Total Revenue $        22,046 Less: Cost and Expenses $        20,773 Income from Operation $          1,273 LEss: Interest Expenses $              130 Income after Interest before taxation $          1,143 Less: Income Taxes $              287 Net Income $              856 Answer = 1 : So there is deficiency in reportin other income after costs and expenses                       in the sing step income statement the other income will show wth sales Answer =2 Recommendation to Boeing company is that they will bifurcated there cost of goods Sold and other expenses in the given statement cost of goods sold and other expenses are clubed. If the cost of goods sold and other administative and selling expenses will be shown in seprate than it will be better and clear picture of income statement will represent.