Question

Tableau Software provides business analytics software products, including Tableau Desktop, Tableau Server, and Tableau Online. It is considered a leader in the data analytics/business intelligence movement. However, Tableau doesn't just license its products for use by others. It also provides maintenance, support, training, and professional services to various customers. As a consequence, its income statement shows two sources of operating revenues (product licenses/maintenance and services) and two related costs of goods/services provided to customers. Presented below are the items adapted from its recent income statement for the year ended December 31 (in thousands, except per share amounts). Net earnings per share were minus $2.35, which would normally be noted as ($2.35), and the weighted-average shares used in the computation was 78,869. Cost of licenses Cost of maintenance and services General and administrative expense Income tax expense License revenue $ 13,534 Maintenance and services revenue 100,025 Other income 102,871 Sales and marketing expense 6,861 Research and development expense 429,204 $447,855 12,266 517,446 334,148 Required: 1. Recognizing that Tableau has two sources of operating revenues, prepare a classified (multiple-step) income statement. 2. Which source of operating revenues produces the higher gross profit? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Recognizing that Tableau has two sources of operating revenues, prepare a classified (multiple-step) income statement. (Enter all losses with a minus sign. Enter your answers in thousands.) TALEAU SOFTWARE Consolidated Statement of Income

Answer 1

Requirement 1

TALEAU SOFTWARE
Consolidated Statement of Income
For Year ended December 31, Current year
(in thousannds, except per share amount)
Net revenues
License Revenue	429204
Maintenance and Service Revenue	447855	877059
Direct Cost
License Cost	13534
Maintenance and Service Cost	100025	113559
Gross Profit		763500
Operating Expenses
General and Administrative expenses	102871
Sales and Marketing Expenses	517466
Research & Development Expenses	334148	954485
Operating Income		-190985
Non operating
Other Income	12266
Income tax expenses	-6861	5405
Net Income		-185580
Earning Per Share		-2.35

Requirement 2

Gross Profit from Licence operations = 429,204- 13,534 = $415,670

Gross Profit from Maintenance and Service operations = 447,855 - 100,025 = $347,830

Thus Source of operating revenue with higher gross profit is Licence Operations

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