P2.26 - Understanding income statement relationships Understanding income statem
ID: 2379186 • Letter: P
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P2.26 - Understanding income statement relationships
Understanding income statement relationships-Apple Inc. Selected data from the September 24, 2011, and September 25, 2010, consolidated balance sheets and income statements for the years then ended for Apple Inc. follow. All amounts are reported in millions. Calculate the amount of Apple's gross profit for each year. Has gross profit as a percentage of sales changed significantly during the past year? Calculate the amount of Apple's operating income for each year. Has operating income as a percentage of sales changed significantly during the past year? After completing parts a and b , calculate the other missing amounts for each year.Explanation / Answer
Statement of Operations 2011 2010 Net Sales $108,249 $65,225 Cost of Sales 64,431 39,541 Gross Margin 43,818 25,684 Operating Expenses: Research and development 2,429 1,782 Selling, General, and Administrative 7,599 5,517 Total operating expenses 10,028 7,299 Operating Income 33,790 18,385 Other Income and Expense 415 155 Income before provision for income taxes 34,205 18,540 Provision for income taxes 8,283 4,527 Net income $25,922 $14,013 Earnings per common share Basic $28.05 $15.41 Diluted $27.68 $15.15 Shares used in computing earnings per share Basic 924,258 909,461 Diluted 936,645 924,712 Market price per share $404.30 $292.32
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