CATERPILLAR INC. SOUTHWEST AIRLINES CO. Statement of Income for a Recent Year Statement of Income for a Recent Year $ 55,184,000 Value measured by product Total sales and revenues Operating revenue: Less: Cost of products sold 40,391,000 Passenger $ 17,658,000 Gross profit $ 14,793,000 Freight 175,000 costs Other 772,000 Less: Operating costs : Selling, general, and administrative expenses $ 5,697,000 Total operating revenue $ 18,605,000 Research and development expenses 2,135,000 Less: Operating expenses: Other operating expenses 1,633,000 Salaries, wages, and benefits $ 5,434,000 $ 9,465,000 $ 5,328,000 Total operating costs Fuel and oil 5,293,000 Operating profit Maintenance materials and repairs 978,000 Less: Other expenses 245,000 Aircraft rentals 295,000 Consolidated profit before taxes $ 5,083,000 Landing fees and other rentals 1,111,000 Provision for income taxes 1,380,000 Depreciation and amortization 938.000 Acquisition and integration 126,000 Profit of consolidated companies $ 3,703,000 Other operating expenses 2,205,000 Total operating expenses $ 16,380,000 WAL-MART STORES, INC. Statement of Income for a Recent Year (continued) Value Total revenues $485,651,000 SOUTHWEST AIRLINES CO. Statement of Income for a Recent Year measured Less: Cost of sales 365,086,000 by product Operating income $ 2.225.000 Gross profit $120,565,000 costs Less: Operating, selling, general, and administrative expenses 93,418,000 Other expenses (income): $ 27,147,000 Interest expense 2$ 130,000 Operating income Less: Interest expense, net . 2,348,000 Capitalized interest (23,000) Interest income (7,000) Income from continuing operations before income taxes $ 24,799,000 Other (gains) losses, net 309.000 Provision for income taxes (7,985,000) Income from discontinued operations, net of tax 285,000 Total other expenses (income) 2$ 409,000 Consolidated net income $ 17,099,000 Income before income taxes $ 1.816.000 Provision for income taxes 680,000 Net income $ 1,136,000

CATERPILLAR INC. SOUTHWEST AIRLINES CO. Statement of Income for a Recent Year Statement of Income for a Recent Year $ 55,184,000 Value measured by product Total sales and revenues Operating revenue: Less: Cost of products sold 40,391,000 Passenger $ 17,658,000 Gross profit $ 14,793,000 Freight 175,000 costs Other 772,000 Less: Operating costs : Selling, general, and administrative expenses $ 5,697,000 Total operating revenue $ 18,605,000 Research and development expenses 2,135,000 Less: Operating expenses: Other operating expenses 1,633,000 Salaries, wages, and benefits $ 5,434,000 $ 9,465,000 $ 5,328,000 Total operating costs Fuel and oil 5,293,000 Operating profit Maintenance materials and repairs 978,000 Less: Other expenses 245,000 Aircraft rentals 295,000 Consolidated profit before taxes $ 5,083,000 Landing fees and other rentals 1,111,000 Provision for income taxes 1,380,000 Depreciation and amortization 938.000 Acquisition and integration 126,000 Profit of consolidated companies $ 3,703,000 Other operating expenses 2,205,000 Total operating expenses $ 16,380,000 WAL-MART STORES, INC. Statement of Income for a Recent Year (continued) Value Total revenues $485,651,000 SOUTHWEST AIRLINES CO. Statement of Income for a Recent Year measured Less: Cost of sales 365,086,000 by product Operating income $ 2.225.000 Gross profit $120,565,000 costs Less: Operating, selling, general, and administrative expenses 93,418,000 Other expenses (income): $ 27,147,000 Interest expense 2$ 130,000 Operating income Less: Interest expense, net . 2,348,000 Capitalized interest (23,000) Interest income (7,000) Income from continuing operations before income taxes $ 24,799,000 Other (gains) losses, net 309.000 Provision for income taxes (7,985,000) Income from discontinued operations, net of tax 285,000 Total other expenses (income) 2$ 409,000 Consolidated net income $ 17,099,000 Income before income taxes $ 1.816.000 Provision for income taxes 680,000 Net income $ 1,136,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Refer to Exhibit 2–3, and answer the following questions.
Required:
1. List the major differences between the income statements shown for Caterpillar, Inc., Walmart Stores, Inc., and Southwest Airlines Company.
2. Explain how cost-accounting data were used to prepare these income statements.
3. On the income statement for Southwest Airlines Company, where would the ticket agents’ salaries be shown? Where would the costs of the computer equipment used to keep track of reservations be included on the statement?
4. On the income statement for Walmart Stores, Inc., where would the cost of newspaper advertising be shown? How about the cost of merchandise?
5. Refer to the income statement for Caterpillar, Inc. Where would the salary of the brand manager who plans advertising for Caterpillar equipment be shown? How about the salary of a production employee? Where would the cost of the raw materials used in the company’s products be included on the statement?

CATERPILLAR INC.
SOUTHWEST AIRLINES CO.
Statement of Income for a Recent Year
Statement of Income for a Recent Year
$ 55,184,000
Value
measured
by product
Total sales and revenues
Operating revenue:
Less: Cost of products sold
40,391,000
Passenger
$ 17,658,000
Gross profit
$ 14,793,000
Freight
175,000
costs
Other
772,000
Less: Operating costs :
Selling, general, and administrative expenses
$ 5,697,000
Total operating revenue
$ 18,605,000
Research and development expenses
2,135,000
Less: Operating expenses:
Other operating expenses
1,633,000
Salaries, wages, and benefits
$ 5,434,000
$ 9,465,000
$ 5,328,000
Total operating costs
Fuel and oil
5,293,000
Operating profit
Maintenance materials and repairs
978,000
Less: Other expenses
245,000
Aircraft rentals
295,000
Consolidated profit before taxes
$ 5,083,000
Landing fees and other rentals
1,111,000
Provision for income taxes
1,380,000
Depreciation and amortization
938.000
Acquisition and integration
126,000
Profit of consolidated companies
$ 3,703,000
Other operating expenses
2,205,000
Total operating expenses
$ 16,380,000
WAL-MART STORES, INC.
Statement of Income for a Recent Year
(continued)
Value
Total revenues
$485,651,000
SOUTHWEST AIRLINES CO.
Statement of Income for a Recent Year
measured
Less: Cost of sales
365,086,000
by product
Operating income
$ 2.225.000
Gross profit
$120,565,000
costs
Less: Operating, selling, general, and administrative expenses
93,418,000
Other expenses (income):
$ 27,147,000
Interest expense
2$
130,000
Operating income
Less: Interest expense, net .
2,348,000
Capitalized interest
(23,000)
Interest income
(7,000)
Income from continuing operations before income taxes
$ 24,799,000
Other (gains) losses, net
309.000
Provision for income taxes
(7,985,000)
Income from discontinued operations, net of tax
285,000
Total other expenses (income)
2$
409,000
Consolidated net income
$ 17,099,000
Income before income taxes
$ 1.816.000
Provision for income taxes
680,000
Net income
$ 1,136,000

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