Reformulating Financial Statements For Warranty Expense $\backslash$table$[[12$ Months Ended $($$ millions$),$Dec. $31,2016,$Dec. $31,2015,$Dec. $31,2014],[$Net sales,$$23,162,$$$23,335,$$$22,316],[$Warranty expense,$421,665,427]]$

Compute the average warranty expense to net sales rate over the past three years.

Round answer to two decimal places $($ex: $0\mathrm{.}02345=2\mathrm{.}35\%)$

$\%$

Using your rounded answer, compute the adjusted warranty expense for each year.

Round answers to one decimal place.

Use a negative sign to indicate if the adjustment decreases an account balance.

$\backslash$table$[[$Income Statements Adjustments,$2016,2015,2014,],[$Adjusted warranty expense,$$,,$$$,],[$Adjustment required to warranty expense,,,,$],[$Income tax expense,,,,$],[$Net Income,,,,$]]$

Income statement data for Whirlpool Industries from the company

$$

s

$2016$

$$financial statements follow. Use these data to reformulate the income statement for

$2014$

$,$

$2015$

$,$

$$and

$2016$

$$under the assumption that warranty expense is a constant percentage of revenue across all three years. Specifically, compute the adjustments to: warranty expense, income tax expense, and net income. The company

$$

s tax rate is

$30$

$\%$

$.$

$12$

$$Months Ended

$($

$ millions

$)$

$$ Dec.

$31$

$,$

$2016$

$$Dec$.$

$31$

$,$

$2015$

$$Dec$.$

$31$

$,$

$2014$

Net sales $

$23$

$,$

$162$

$$$

$23$

$,$

$335$

$$$

$22$

$,$

$316$

Warranty expense

$421665427$

Compute the average warranty expense to net sales rate over the past three years.

Round answer to two decimal places

$($

ex:

$0\mathrm{.}02345$

$=$

$2\mathrm{.}35$

$\%$

$)$

Answer

$1$

$\%$

Using your rounded answer, compute the adjusted warranty expense for each year.

Round answers to one decimal place.

Use a negative sign to indicate if the adjustment decreases an account balance.

Adjusted warranty expense

Adjustment required to warranty expense

Income tax expense

Net Income