The single-step income statement emphasizesQuestiona.the gross profit figure.b.total revenues and total expenses.c.extraordinary items more than it is emphasized in the multiple-step income statement.d.the various components of income from continuing operations.LO 3 Prepare an income statement.Format of the Income StatementFormat of the Income Statement
4-18Illustration (E4-5): Prepare a income statement from the data below using the multiple-step form.Format of the Income StatementFormat of the Income StatementAdvance slide in presentation mode to reveal answers.LO 3 Prepare an income statement.
4-19A separation of operating and non operating activities of a company exists in QuestionFormat of the Income StatementFormat of the Income StatementLO 3 Prepare an income statement.
4-201.Understand the uses and limitations of an income statement.2.Describe the content and format of the income statement.3.Prepare an income statement.4.Explain how to report various income items.5.Identify where to report earnings per share information.6.Understand the reporting of accounting changes and errors.7.Prepare a retained earnings statement.8.Explain how to report other comprehensive income.After studying this chapter, you should be able to:Income Statement and Related Information4LEARNING OBJECTIVESLEARNING OBJECTIVES
4-21Companies are required to report unusual and irregular items as part of net income so users can better determine the long-run earning power of the company.These income items fall into four general categories:1.Unusual gains and losses.2.Discontinued operations.3.Extraordinary items.4.Noncontrolling interest.LO 4 Explain how to report various income items.Reporting Various Income ItemsReporting Various Income ItemsModified all inclusive conceptModified all inclusive concept
4-22LO 4Reporting Various Income ItemsReporting Various Income ItemsUnusual Gains and LossesThe following items may need separate disclosure in the income statement. 1.Losses on the write-down or write-off of assets.2.Gains or losses from exchange or translation of foreign currencies.3.Restructuring charges.4.Other gains or losses from sale or abandonment of property, plant, or equipment used in the business.5.Effects of a strike.6.Adjustment of accruals on long-term contracts.
4-23LO 4 Explain how to report various income items.Reporting Various Income ItemsReporting Various Income ItemsIllustration 4-6Number of Irregular Items Reported in a Recent Year by 500 Large CompaniesUnusual Gains and Losses
4-24Occurs when,(1)company eliminates the results of operations of a component of the business, and(2)there is no significant involvement in that component after the disposal transaction.