《《精编》Income and Changes in Retained Earnings》由会员分享,可在线阅读,更多相关《《精编》Income and Changes in Retained Earnings(42页珍藏版)》请在金锄头文库上搜索。
1、Chapter12 IncomeandChangesinRetainedEarnings ReportingtheResultsofOperations Thistaxexpensedoesnotincludeeffectsofunusual nonrecurringitems Theseunusual nonrecurringitemsareeachreportednetoftaxes DiscontinuedOperations Income Lossfromoperatingthesegmentpriortodisposal Income Lossondisposalofthesegme
2、nt Whenmanagemententersintoaformalplantosellordiscontinueasegmentofthebusiness DiscontinuedOperations Whenmanagemententersintoaformalplantosellordiscontinueasegmentofthebusiness Asegmentmustbeaseparatelineofbusinessactivityoranoperationthatservicesadistinctcategoryofcustomers During2000 ApexCo solda
3、nunprofitablesegmentofthecompany Thesegmenthadanetlossfromoperationsduringtheperiodof 150 000anditsassetssoldatalossof 100 000 Apexreportedincomefromcontinuingoperationsof 350 000 Allitemsaretaxedat30 Howwillthisappearontheincomestatement DiscontinuedOperationsExample DiscontinuedOperationsExample I
4、ncomeStatementPresentation DiscontinuedOperationsExample Materialinamount Gainsorlossesthatarebothunusualinnatureandnotexpectedtorecurintheforeseeablefuture Reportednetofrelatedtaxes ExtraordinaryItems During2000 ApexCo experiencedalossof 75 000duetoanearthquakeatoneofitsmanufacturingplantsinNashvil
5、le Thiswasconsideredanextraordinaryitem Thecompanyreportedincomebeforeextraordinaryitemof 175 000 Allgainsandlossesaresubjecttoa30 taxrate Howwouldthisitemappearonthe2000incomestatement ExtraordinaryItemsExample ExtraordinaryItemsExample IncomeStatementPresentation ExtraordinaryItemsExample Accounti
6、ngChanges ChangeinAccountingPrinciple OccurswhenchangingfromoneGAAPmethodtoanotherGAAPmethod Makeacatch upadjustmentknownasthecumulativeeffectofachangeinaccountingprinciple Thecumulativeeffectisreportednetoftaxesandafterextraordinaryitems ChangeinAccountingPrincipleExample Alsoin2000 ApexCo decidedt
7、ochangefromthedouble decliningbalancetothestraight linemethodfordepreciation Theeffectofthischangeisanincreaseinnetincomeof 65 000 Apexreportedincomebeforecumulativeeffectofanaccountingchangeof 122 500duringtheyear Allitemsofincomearesubjecttoa30 taxrate Howwouldthisitemappearontheincomestatement Ch
8、angeinAccountingPrincipleExample Computation Computation IncomeStatementPresentation ChangeinAccountingPrincipleExample ChangeinEstimates Revisionofapreviousaccountingestimate Thenewestimateshouldbeusedinthecurrentandfutureperiods Theprioraccountingresultsshouldnotbedisturbed ChangeinEstimatesExampl
9、e OnJanuary1 1997 wepurchasedequipmentcosting 30 000 withausefullifeof10yearsandnosalvagevalue During2000 wedeterminethattheremainingusefulis5years 8 yeartotallife Weusestraight linedepreciation Computethereviseddepreciationexpensefor2000 Recorddepreciationexpenseof 4 200for2000andsubsequentyears Ch
10、angeinEstimatesExample Let smoveontoafewfinaltopics Price earningsRatio P E Often thePrice EarningsRatioisusedtoevaluatethereasonablenessofacompany抯stockprice Let sexaminethisfurther EarningsPerShare EPS Ameasureofthecompany抯profitabilityandearningpowerfortheperiod Basedonthenumberofsharesissuedandt
11、helengthoftimethatnumberremainedunchanged EarningsPerShare EPS PartialIncomeStatement UsetheinformationfromApexCo thatwasgeneratedearlier AssumethatApexhasweightedaveragesharesoutstandingof156 250 PrepareapartialincomestatementshowingtheEPSforIncomefromOperationsandfortheotherspecialitems EarningsPe
12、rShare EPS PartialIncomeStatement Roundingerror EarningsPerShare EPS Ifpreferredstockispresent subtractpreferreddividendsfromnetincomepriortocomputingEPS EPSisrequiredtobereportedintheincomestatement AccountingforCashDividends Declaredbyboardofdirectors Notlegallyrequired Createsliabilityatdeclarati
13、on RequiressufficientRetainedEarningsandCash DividendDates DateofDeclarationBoardofdirectorsdeclaresthedividend Recordaliability DividendDates Ex DividendDateThedaywhichservesastheownershipcut offpointforthereceiptofthemostrecentlydeclareddividend DividendDates X DateofRecordStockholdersholdingshare
14、sonthisdatewillreceivethedividend Noentry DateofPaymentRecordthepaymentofthedividendtostockholders DividendDates DividendDatesQuestion OnJune1 1999acorporation sboardofdirectorsdeclaredadividendforthe2 500sharesofits 100parvalue 8 preferredstock ThedividendwillbepaidonJuly15 Whichofthefollowingwillb
15、eincludedintheJuly15entry a DebitRetainedEarnings 20 000 b DebitDividendsPayable 20 000 c CreditDividendsPayable 20 000 d CreditPreferredStock 20 000 OnJune1 1999acorporation抯boardofdirectorsdeclaredadividendforthe2 500sharesofits 100parvalue 8 preferredstock ThedividendwillbepaidonJuly15 Whichofthe
16、followingwillbeincludedintheJuly15entry a DebitRetainedEarnings 20 000 b DebitDividendsPayable 20 000 c CreditDividendsPayable 20 000 d CreditPreferredStock 20 000 DividendDatesQuestion 100 8 8dividendpershare 8 2 500 20 000totaldividend AccountingforStockDividends Nochangeintotalstockholders equity Allstockholdersretainsamepercentageownership Nochangeinparvalues Distributionofadditionalsharesofstocktostockholders SummaryofEffectsofStockDividendsandStockSplits PriorPeriodAdjustments Adjustretain