Nontypical business activities resulting in outflows of assets will normally

Nontypical business activities resulting in outflows

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Nontypical business activities resulting in outflows of assets will normally generate transactions classified as losses . LO 2 Describe the content and format of the income statement.
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4-9 Revenues & Gains Expenses & Losses Net Income Single- Step Single- Step No implication that one type of revenue or expense item has priority over another. Single-Step Income Statements Format of the Income Statement Format of the Income Statement Illustration 4-5 LO 3 Prepare an income statement.
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4-10 CABRERA COMPANY Income Statement For The Year Ended December 31, 2014 1. Operating Section 2. Nonoperating Section 3. Income tax Multiple-Step Multiple-Step Illustration 4-2
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4-11 Format referred to as multiple-step income statement . Separates operating transactions from nonoperating transactions. Matches costs and expenses with related revenues. Highlights certain components of income that analysts use assessing financial performance. Multiple-step Income Statement Multiple-step Income Statement Intermediate Components LO 3 Prepare an income statement.
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4-12 Common for companies to present some or all of the following sections and totals within the income statement. 1. Operating section: Revenues and expenses from the entity’s principal operations. 2. Nonoperating section: Revenues and expenses resulting from secondary or auxiliary activities of the company. 3. Income tax 4. Discontinued operations 5. Extraordinary items 6. Noncontrolling interest 7. Earnings per share Intermediate Components Intermediate Components
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4-13 Condensed Income Statements Condensed Income Statements Illustration 4-3 Includes only totals of expense groups. Supplementary schedules support the totals.
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4-14 Illustration (E4-5): Prepare a income statement from the data below using the multiple-step form. Format of the Income Statement Format of the Income Statement Advance slide in presentation mode to reveal answers. LO 3 Prepare an income statement.
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4-15 The importance of components of income, as well as the bottom line, is illustrated in the recent case of Chipotle . Its stock had climbed fourfold in five years and for good reason. The company had been reporting surprisingly high bottom-line for revenues . The stock fell 21 percent, from $404 to $317, in a day. And Chipotle was not alone. Six in 10 large companies reported results in that same quarter that missed revenue targets. In response to the bad revenue news, Priceline.com fell $117 to $562 after reporting revenue that was lower than analysts had expected. The story has been the same for dozens of companies across industries, from Coach , a luxury goods retailer, to Boston Scientific , which sells medical devices, to glass-container maker Owens-Illinois . The recent focus on the top line, revenue, arises because market expectations for revenues do not seem to jive with the companies’ optimistic profit picture. For example, revenues are expected to drop by about 2 percent in 2013 for companies in the S&P 500. And while companies might report a income and investors were clamoring to buy. However,
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