Q A 1 on Required: 1. Which is typically higher-GAAP net income or non-GAAP net income? Is that true for Cisco? 2. Which line item provides the biggest upward adjustment to GAAP net income in calculating non-GAAP net income? 3. What is a justification management provides for its calculation of non-GAAP net income? 4. A concern with non-GAAP reporting is that managers are excluding normal operating expenses for the purpose of reporting higher performance, which could mislead investors and creditors. For which line item is this most likely the concern? Integrating Case 4-7 Balance sheet and income statement; Chapters 3 and 4LO4-3,LO4-4 Rice Corporation is negotiating a loan for expansion purposes and the bank requires financial statements. Before closing the accounting records for the year ended December 31, 2024, Rice's controller prepared the following financial statements: DIGE CORRORATION N 2 W S 3 X # command O E D $ 4 C R G Search or type URL F 07 d % 5

Required: 1. Which is typically higher-GAAP net income or non-GAAP net income? Is that true for Ciseo? 2. Which line item provides the biggest upward adjustment to GAAP net income in calculating non-GAAP net income? 3. What is a justification management provides for its calculation of non-GAAP net income? 4. A concern with non-GAAP reporting is that managers are excluding normal operating expenses for the purpose of reporting higher performance, which could mislead investors and creditors. For which line item is this most likely the concern? Rice Corporation is negotiating a loan for expansion purposes and the bank requires financial statements. Before closing the accounting records for the year ended December 31,2024 , Rice's controller prepared the following financial statements: Disclosure note: For its internal budgeting process, Cisco's management uses financial statements that do not include, when applicable, share-based compensation expense, amortization of acquisition-related intangible assets, acquisition-elated/divestiture costs, simnificant asset impairments and restructurings, signifleant litigation settlements, and other contingencies, gains and lossts on equity investments, the income tax effocts of the foregoing and significant tax matters. Cisco's management also uses the foregoing non-GAAP measures, in addition to the cotresponding GAAP measures, in reviewing the financial results of Cisco. Required: 1. Which is typically higher-GAAP net income or non-GAAP net income? ts that true for Casco? 2. Which line item prowides the biggest upward adjustment to GAAP net income in calculating non-GAAP net income? 3. What is a justification management provides for its calculation of non-GAAP net income? 4. A concern with non-GAAP reporting is that managers are exeluding normal operating expenses for the purpose of reporting higher performance, which could mislead investors and creditors. For which line item is this most likely the concern