(a) The following numbers were extracted from a balance sheet (in million):Operating assets ………...

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(a) The following numbers were extracted from a balance sheet (in million):
Operating assets ……… $547
Financial assets ………… 145
Total liabilities …………. 322

Of the total liabilities, $190 million were deemed to the financing liabilities. Prepare a reformulated balance sheet that distinguishes items involved in operations from those involved in financing activities.
(b) An income statement consists of the following line items (in millions):
Revenue ……………… $4,356
Cost of goods sold ……. 3,487
Operating expenses …….. 428
Interest income ………….. 56
Interest expense ………… 132

The firm pays no taxes. Prepare a reformulated income statement that distinguishes items involved in operations from those involved in financing activities.

David · Accepted Answer

(a) The following numbers were extracted from a balance sheet 
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(a) The following numbers were extracted from a balance sheet (in million): 
Operating assets ……… $547 
Financial assets ………… 145 
Total liabilities …………. 322
Of the total liabilities, $190 million were deemed to the financing liabilities.

(a) The following numbers were extracted from a balance sheet (in million): Operating assets ……… $547 Financial assets ………… 145 Total liabilities …………. 322 Of the total liabilities, $190 million were...

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