Chapter 2, Problem 54P

Refer to Exhibit 2–3, and answer the following questions. Required:

1. 1. List the major differences between the income statements shown for Caterpillar, Inc., Walmart Stores, Inc., and Southwest Airlines Company.
2. 2. Explain how cost-accounting data were used to prepare these income statements.
3. 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. 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. 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?