Question

ssignment CALCULATOR MESSAGE MY INSTRUCTOR FULL SCREENPRINTER VERSION BACK Exercise 1-5 The following information was taken from the 2014 financial statements of pharmaceutical giant Merck a Co. (All dollar amounts are in millions.) Retained earnings, January 1, 2014 Cost of goods sold Selling and administrative expenses Dividends Sales revenue Research and development expense Income tax expense $42,026.3 9,461.4 8,641.1 ,158.2 42,163 6,266 3,137.5

Answer 1

Merck and Co

Income statement for the year ended December 31, 2014

Particulars Income: Sales Revenue Total income (A) ount Amount 42163 42163 Expenses. Cost of Goods sold Selling and Administrative expenses Research and development expenses Income tax expense Total expenses (B Net Income (A-B) for the year ended December 31, 2014 9461.4 8641.1 6266 3137.5 27506 1465

Retained Earnings Statement for the year ended December 31 2014 :

note: the term Dividends in the question is understood as the dividends paid during the year (as an expense)

Particulars Amount Retained Earnings as on January 1, 2014 42026.3 Add: Income earned during the year ended December 31, 2014 14657 Total 56683.3 Less: Dividends paid during the year 3158.2 Retained Earnings as on December 31, 201453525.1