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Case 6: Moog

Financial Statement Construction: Consolidated Statement of Earnings

The future of military warfare is being defined by innovations and advancements in technology. For example, Moog, Inc., has recently seen their flight control device installed in the V-22 Osprey, a wing-folding aircraft that is effectively both a helicopter and a fighter plane.

But this is just the tip of the iceberg. Moog is in the process of creating technology that will allow unmanned vehicles and airplanes to be operated by remote control. Sound like futuristic science fiction? It really is not that far away. Think about the advantages of flying from a remote location. Today, it costs millions of dollars to train a single fighter pilot. When the pilot is lost in a war, a new pilot must be trained in his place. However, if the pilot is flying the plane from a remote, safe location, even when the plane is lost in a battle, the pilot will survive to flying again.

Advancements are taking place in artillery as well. You may have heard of the expression, "I've got a bullet with your name on it." Well, this may be more true than you realize. Smart bullets are being developed that use the same technology as a guided missile. Instead of locking on a stationary target many miles away, this bullet will receive continually updated target location information that will enable it to follow a moving target even if that target goes around corners.

No matter how good Moog's technology, they still need to construct their Consolidated Statement of Earnings to continue to be a successful company. Below is an alphabetical list of the items that appear on their Consolidated Statement of Earnings. Using these items, reconstruct the statement by putting all of the items in the correct order. Double check your answer to make sure the numbers add up.

Items on the Consolidated Statement of Earnings

Cost of Sales $652,447
Earnings Before Income Taxes $83,469
Income Taxes $26,182
     Interest $11,080
Gross Profit $286,405
Net Earnings $57,287
Net Earnings Per Share  
     Basic $2.21
     Diluted $2.17
Net Sales $938,852
     Other $750
     Research and Development $29,729
     Selling, general and administrative $161,377





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