ch04 kieso中级会计学英文课件概要1.ppt

Change in Estimate Example After 7 years Net book value $160,000 Salvage value (new) 5,000 Depreciable base 155,000 Useful life remaining 8 years Annual depreciation $ 19,375 Depreciation Expense calculation for 2005. Depreciation expense 19,375 Accumulated depreciation 19,375 Journal entry for 2005 LO 4 Explain how to report irregular items. Corrections of Errors Result from: mathematical mistakes mistakes in application of accounting principles oversight or misuse of facts Corrections treated as prior period adjustments Adjustment to the beginning balance of retained earnings Reporting Irregular Items LO 4 Explain how to report irregular items. Relates the income tax expense to the specific items that give rise to the amount of the tax expense. Income tax is allocated to the following items: (1) Income from continuing operations before tax (2) Discontinued operations (3) Extraordinary items (4) Changes in accounting principle (5) Correction of errors Intraperiod Tax Allocation LO 5 Explain intraperiod tax allocation. Total Tax Allocated Example of Intraperiod Tax Allocation $24,000 (135) (61) (231) $23,573 Note: losses reduce the total tax LO 5 Explain intraperiod tax allocation. An important business indicator. Measures the dollars earned by each share of common stock. Must be disclosed on the the income statement. Earnings Per Share LO 6 Identify where to report earnings per share information. Net income - Preferred dividends Weighted average number of shares outstanding Calculation Brief Exercise 4-8 In 2007, Kirby Puckett Corporation reported net income of $1,200,000. It declared and paid preferred stock dividends of $250,000. During 2007, Puckett had a weighted average of 190,000 common shares outstanding. Compute Puckett’s 2007 earnings per share. Earnings Per Share - $250,000 $1,200,000 190,000 = $5.00 per share LO 6 Identify where to report earnings per share information. Net income - Preferred dividends Weigh