LO 4 Explain how to report various income items Noncontrolling Interest

Lo 4 explain how to report various income items

This preview shows page 30 - 39 out of 60 pages.

LO 4 Explain how to report various income items. Noncontrolling Interest Noncontrolling Interest Illustration 4-16 Presentation of Noncontrolling Interest The noncontrolling interest amounts are not an expense or dividend, but are allocations of net income (loss) to the noncontrolling interest.
Image of page 30
4-31 Noncontrolling interest amounts are allocations of net income (loss) to the noncontrolling interest. Illustration 4-9 Illustration 4-19
Image of page 31
4-32 LO 4 Explain how to report various income items. Summary of Various Income Summary of Various Income Illustration 4-17
Image of page 32
4-33 A significant business indicator. Measures the dollars earned by each share of common stock. Must be disclosed on the income statement. LO 5 Identify where to report earnings per share information. Net Income - Preferred Dividends Weighted Average of Common Shares Outstanding Earnings per Share Reporting Various Income Items Reporting Various Income Items
Image of page 33
4-34 Illustration: Lancer, Inc. reports net income of $350,000. It declares and pays preferred dividends of $50,000 for the year. The weighted-average number of common shares outstanding during the year is 100,000 shares. Lancer computes earnings per share as follows:Earnings per ShareEarnings per Share- $50,000$350,000100,000=$3.00per shareLO 5 Identify where to report earnings per share information.Net Income - Preferred Dividends Weighted Average of Common Shares OutstandingAdvance slide in presentation mode to reveal answers.
Image of page 34
4-35 EPS Divide by weighted- average shares outstanding Illustration 4-19 Earnings per Share Earnings per Share LO 5
Image of page 35
4-36 Retrospective adjustment. Cumulative effect adjustment to beginning retained earnings. Approach preserves comparability across years. Examples include: change from FIFO to average cost. change from the percentage-of-completion to the completed-contract method. Other Reporting Issues Other Reporting Issues Accounting Changes and Errors LO 6 Understand the reporting of accounting changes and errors. Changes in Accounting Principle
Image of page 36
4-37 Change in Accounting Principle: Gaubert Inc. decided in March 2014 to change from FIFO to weighted-average inventory pricing. Gaubert’s income before taxes, using the new weighted-average method in 2014, is $30,000. Illustration 4-20 Calculation of a Change in Accounting Principle Illustration 4-21 Income Statement Presentation of a Change in Accounting Principle (Based on 30% tax rate) Pretax Income Data Accounting Changes Accounting Changes Advance slide in presentation mode to reveal answers. LO 6
Image of page 37
4-38 Accounted for in the period of change or the period of and the future periods if the change affects both. Not handled retrospectively. Not considered errors. Examples include: Useful lives and salvage values of depreciable assets. Allowance for uncollectible receivables. Inventory obsolescence.
Image of page 38
Image of page 39

You've reached the end of your free preview.

Want to read all 60 pages?

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture