Reformulating Financial Statements For Warranty Expense Income statement data for Whirlpool Industries from the company’s 2016 financial statements follow

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Reformulating Financial Statements For Warranty Expense

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	421	665	427

Average warranty expense to net sales rate over the past three years is 2.20%.

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.

Income Statement Adjustments	2016	2015	2014
Adjusted Warranty Expense	?	?	?
Adjustment required to warranty expense	?	?	?
Income tax expense	?	?	?
Net Income	?	?	?