For this question you must use the excerpts from the Income Statement of Campbell Soup Company, found in Appendix 2 of Discovering Accounting.

1. On its Income Statement, Campbells has cost of products sold. What is the more commonly used name for this account? What does it represent?
2. On its Income Statement, Campbells has research and development expenses. Why is money spent on research and development expensed?
3. On its Income Statement, Campbells has earnings from continuing operations and earnings from discontinued operations. What is the difference between these two amounts? Why are they separated?
4. What is Campbells basic earnings per share from net earnings (net income)? Did this ratio improve from last year?

CAMPBELL SOUP COMPANY Consolidated Statements of Earnin (millions, except per share amounts) 2015 2017 2016 Net sales $ 7,890 7,961 $ 8,082 Costs and expenses Cost of products sold 5,300 884 601 4,831 817 488 98 238 18 6,490 1,400 112 5,181 893 641 124 131 31 7,001 960 115 4 849 286 563 Marketing and selling expenses. Administrative expenses Research and development expenses Other expenses (income) 24 102 7.028 1,054 108 Restructuring charges. Total costs and expenses. Earnings before interest and taxes Interest expense Interest income Earnings before taxes Taxes on earnings Net earnings 949 283 1,293 406 887 Less: Net earnings (loss) attributable to noncontrolling interests Net earnings attributable to Campbell Soup Company Per Share Basic Net earnings attributable to Campbell Soup Company Weighted average shares outstanding basic Per Share-Assuming Dilution Net earnings attributable to Campbell Soup Company Weighted average shares outstanding See accompanying Notes to Consolidated Financial Statements. 887 S 563 S $ 666 S 2.91 182 2.13 305 309 312 S 2.89 181 2.13 -assuming dilution 311 307 313 CAMPBELL SOUP COMPANY Consolidated Statements of Earnin (millions, except per share amounts) 2015 2017 2016 Net sales $ 7,890 7,961 $ 8,082 Costs and expenses Cost of products sold 5,300 884 601 4,831 817 488 98 238 18 6,490 1,400 112 5,181 893 641 124 131 31 7,001 960 115 4 849 286 563 Marketing and selling expenses. Administrative expenses Research and development expenses Other expenses (income) 24 102 7.028 1,054 108 Restructuring charges. Total costs and expenses. Earnings before interest and taxes Interest expense Interest income Earnings before taxes Taxes on earnings Net earnings 949 283 1,293 406 887 Less: Net earnings (loss) attributable to noncontrolling interests Net earnings attributable to Campbell Soup Company Per Share Basic Net earnings attributable to Campbell Soup Company Weighted average shares outstanding basic Per Share-Assuming Dilution Net earnings attributable to Campbell Soup Company Weighted average shares outstanding See accompanying Notes to Consolidated Financial Statements. 887 S 563 S $ 666 S 2.91 182 2.13 305 309 312 S 2.89 181 2.13 -assuming dilution 311 307 313