Hello.

I noticed in Chegg's textbook solutions section for Financial and Managerial Accounting for MBA's 4th edition, chapter 5 question 36 is missing an answer. Will you please solve question 36 in chapter 5 please.

Analyzing and Interpreting Income Components and Disclosures

The income statement for Xerox Corporation follows.

Year Ended December 31 (in millions, except per-share data)

2012

2011

2010

Revenues
Sales	6,578.00	7,126.00	7,234.00
Outsourcing, service and rentals	15,215.00	14,868.00	13,739.00
Finance income	597.00	632.00	660.00
	---------------	-------------	---------------
Total Revenues	22,390.00	22,626.00	21,633.00
Costs and expenses
Cost of sales	4,362.00	4,697.00	4,741.00
Cost of outsourcing, service and rentals	10,802.00	10,269.00	9,195.00
Equipment financing interest	198.00	231.00	246.00
Research, development and engineering expenses	655.00	721.00	781.00
Selling, administrative and general expenses	4,288.00	4,497.00	4,594.00
Restructuring and asset impairment charges	153.00	33.00	483.00
Acquisition-related costs	-	-	77.00
Amortization of intangible assets	328.00	398.00	312.00
Curtailment gain	-	(107.00)	-
Other expenses, net	256.00	322.00	389.00
	--------------	--------------	-----------
Total costs and expenses	21,042.00	21,061.00	20,818.00
Income before income taxes and equity income	1,348.00	1,565.00	815.00
Income tax expense	277.00	386.00	256.00
Equity in net income of unconsolidated affiliates	152.00	149.00	78.00
	----------	----------	----------
Net income	1,223.00	1,328.00	637.00
Less: Net income attributable to noncontrolling interests	28.00	33.00	31.00
	----------	----------	----------
Net income attributable to Xerox	1,195.00	1,295.00	605.00
Basic earnings per share	0.90	0.92	0.44
Diluted earnings per share	0.88	0.90	0.43

a. Xerox reports several sources of income. How should revenue be recognized for each of these business activities? Explain.

b. Compute the relative size of sales revenue (total) and the revenue from outsourcing, service and rentals. Hint: Scale each type of revenue by total revenue. What observations can be made about the different sources of revenue?

c. Xerox reports research, development and engineering expenses (R&D) each year. Compare R&D spending over the three years. Hint: Scale R&D by total revenue each year.

d. Xerox reports restructuring costs each year. (1) Describe the three typical categories of restructuring costs and the accounting for each. (2) How do you recommend treating these costs for analysis purposes? (3)Should regular recurring restructuring costs be treated differently than isolated occurrences of such costs for analysis purposes? (4) What does a (negative) expense imply about one or more previous years accruals?

e. Xerox reports $256 million in expenses in 2012 labeled as Other expenses, net. How can a company use such an account to potentially obscure its actual financial performance?

Thanks!