Intermediate Accounting ch04.ppt

Learning Objectives Understand the uses and limitations of an income statement. Prepare a single-step income statement. Prepare a multiple-step income statement. Explain how to report irregular items. Explain intraperiod tax allocation. Identify where to report earnings per share information. Prepare a retained earnings statement. Explain how to report other comprehensive income. Income Statement Income Statement Income Statement Format of the Income Statement Format of the Income Statement Format of the Income Statement Single-Step Format Single-Step Format Single-Step Format Format of the Income Statement Multiple-Step Format Multiple-Step Format Multiple-Step Format Multiple-Step Format Reporting Irregular Items Reporting Irregular Items Reporting Irregular Items Reporting Discontinued Operations Reporting Discontinued Operations Reporting Irregular Items Reporting Extraordinary Items Reporting Extraordinary Items Reporting Extraordinary Items Reporting Extraordinary Items Reporting Extraordinary Items Reporting Irregular Items Reporting Irregular Items Reporting Irregular Items Reporting Irregular Items Reporting Irregular Items Reporting Irregular Items Reporting Irregular Items Change in Estimate Example Change in Estimate: Arcadia HS, purchased equipment for $510,000 which was estimated to have a useful life of 10 years with a salvage value of $10,000 at the end of that time. Depreciation has been recorded for 7 years on a straight-line basis. In 2012 (year 8), it is determined that the total estimated life should be 15 years with a salvage value of $5,000 at the end of that time. Questions: What is the journal entry to correct the prior years’ depreciation? Calculate the depreciation expense for 2012. Change in Estimate Example Change in Estimate Example Reporting Irregular Items Reporting Irregular Items Special Reporting Issues Special Reporting Issues Special Reporting Issues Example of Intraperiod Tax Allocation Special Reporting Issues Special Report