Lo 4 explain how to report various income items

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LO 4 Explain how to report various income items.Noncontrolling InterestNoncontrolling InterestIllustration 4-16Presentation of Noncontrolling InterestThe noncontrolling interest amounts are not an expense or dividend, but are allocations of net income (loss) to the noncontrolling interest.
4-33Noncontrolling interest amounts are allocations of net income (loss) to the noncontrolling interest.Illustration 4-9Illustration 4-19
4-34LO 4 Explain how to report various income items.Summary of Various IncomeSummary of Various IncomeIllustration 4-17
4-35A 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 OutstandingEarnings per ShareReporting Various Income ItemsReporting Various Income Items
4-36Illustration: 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.
4-37EPSDivide by weighted-average shares outstanding Illustration 4-19Earnings per ShareEarnings per ShareLO 5
4-38Retrospective 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 IssuesOther Reporting IssuesAccounting Changes and ErrorsLO 6 Understand the reporting of accounting changes and errors.Changes in Accounting Principle
4-39Change 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 4-20Calculation of a Change inAccounting PrincipleIllustration 4-21Income StatementPresentation of a Changein Accounting Principle (Based on 30% tax rate)Pretax Income DataAccounting ChangesAccounting ChangesAdvance slide in presentation mode to reveal answers.LO 6
4-40Accounted 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.Examplesinclude:Useful lives and salvage values of depreciable assets.Allowance for uncollectible receivables.Inventory obsolescence.

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