ch04 kieso中级会计学英文.pptVIP

;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;Evaluate past performance. Predicting future performance. Help assess the risk or uncertainty of achieving future cash flows.;Companies omit items that cannot be measured reliably. Income is affected by the accounting methods employed. Income measurement involves judgment.;Companies have incentives to manage income to meet or beat Wall Street expectations, so that the market price of stock increases and the value of stock options increase. ;Elements of the Income Statement;Elements of the Income Statement;Elements of the Income Statement;Single-Step Income Statement;The single-step income statement emphasizes a. 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.;Separates operating transactions from nonoperating transactions. Matches costs and expenses with related revenues. Highlights certain intermediate components of income that analysts use. ;Multiple-Step Income Statement;Review;LO 4 Explain how to report irregular items.;Irregular items fall into six categories Discontinued operations. Extraordinary items. Unusual gains and losses. Changes in accounting principle. Changes in estimates. Corrections of errors.;Discontinued Operations occurs when, (a) company eliminates the results of operations and cash flows of a component. there is no significant continuing involvement in that component. Amount reported “net of tax.”;Exercise: McCarthy Corporation had after tax income from continuing operatio