The following information is taken from the 2010 financial statements of pharmaceutical giant Merck and Co. All dollar amounts are in millions.

Retained earnings, January 1, 2010 $41,405 

Materials and production expenses 18,396 

Administrative and marketing expenses 13,245

Dividends 4,730 

Sales revenue 45,987

Research and development expenses 10,991 

Tax expense 671 

Other expenses 1,823

Instructions (to ) After analyzing the data, prepare an income statement and an income statement for the year ending December 31, 2010. (b) Assume that Merck decided to reduce its research and development expenses by 50%. What would be the short-term implications? What would be the long-term implications? How do you think the stock market would react?

Answer rating: 100% (QA)

a Income Statement for the year ending December 31 2010 Sales revenue 45987 Cost of goods sold Mater... View the full answer