Income and Changes in Retained Earnings(英文版)(ppt 42页).ppt

Chapter12,IncomeandChangesinRetainedEarnings,ReportingtheResultsofOperations,Thistaxexpensedoesnotincludeeffectsofunusual,nonrecurringitems.,Theseunusual,nonrecurringitemsareeachreportednetoftaxes.,DiscontinuedOperations,Income/Lossfromoperatingthesegmentpriortodisposal.,Income/Lossondisposalofthesegment.,Whenmanagemententersintoaformalplantosellordiscontinueasegmentofthebusiness.,DiscontinuedOperations,Whenmanagemententersintoaformalplantosellordiscontinueasegmentofthebusiness.,Asegmentmustbeaseparatelineofbusinessactivityoranoperationthatservicesadistinctcategoryofcustomers.,During2000,ApexCo.soldanunprofitablesegmentofthecompany.Thesegmenthadanetlossfromoperationsduringtheperiodof$150,000anditsassetssoldatalossof$100,000.Apexreportedincomefromcontinuingoperationsof$350,000.Allitemsaretaxedat30%.Howwillthisappearontheincomestatement?,DiscontinuedOperationsExample,DiscontinuedOperationsExample,IncomeStatementPresentation:,DiscontinuedOperationsExample,Materialinamount.Gainsorlossesthatarebothunusualinnatureandnotexpectedtorecurintheforeseeablefuture.Reportednetofrelatedtaxes.,ExtraordinaryItems,During2000,ApexCo.experiencedalossof$75,000duetoanearthquakeatoneofitsmanufacturingplantsinNashville.Thiswasconsideredanextraordinaryitem.Thecompanyreportedincomebeforeextraordinaryitemof$175,000.Allgainsandlossesaresubjecttoa30%taxrate.Howwouldthisitemappearonthe2000incomestatement?,ExtraordinaryItemsExample,ExtraordinaryItemsExample,IncomeStatementPresentation:,ExtraordinaryItemsExample,AccountingChanges,ChangeinAccountingPrinciple,OccurswhenchangingfromoneGAAPmethodtoanotherGAAPmethod.Makeacatch-upadjustmentknownasthecumulativeeffectofachangeinaccountingprinciple.Thecumulativeeffectisreportednetoftaxesandafterextraordinaryitems.,ChangeinAccountingPrincipleExample,Alsoin2000,ApexCo.decidedtochangefromthedouble-decliningbalancetothestraight-linemethodfordepreciation.Theeffectofthischangeisanincreaseinnetincomeof$65,000.Apexreportedincomebeforecumulativeeffectofanaccountingchangeof$122,500duringtheyear.Allitemsofincomearesubjecttoa30%taxrate.Howwouldthisitemappearontheincomestatement?,ChangeinAccountingPrincipleExample,Computation:,Computation:,IncomeStatementPresentation:,ChangeinAccountingPrincipleExample,ChangeinEstimates,Revisionofapreviousaccountingestimate.Thenewestimateshouldbeusedinthecurrentandfutureperiods.Theprioraccountingresultsshouldnotbedisturbed.,ChangeinEstimatesExample,OnJanuary1,1997,wepurchasedequipmentcosting$30,000,withausefullifeof10yearsandnosalvagevalue.During2000,wedeterminethattheremainingusefulis5years(8-yeartotallife).Weusestraight-linedepreciation.Computethereviseddepreciationexpensefor2000.,Recorddepreciationexpenseof$4,200for2000andsubsequentyears.,ChangeinEstimatesExample,Letsmoveontoafewfinaltopics.,Price-earningsRatio(P/E),Often,thePrice-EarningsRatioisusedtoevaluatethereasonablenessofacompany抯stockprice.,Letsexaminethisfurther.,EarningsPerShare(EPS),Ameasureofthecompany抯profitabilityandearningpowerfortheperiod.,Basedonthenumberofsharesissuedandthelengthoftimethatnumberremainedunchanged.,EarningsPerShare(EPS)-PartialIncomeStatement,UsetheinformationfromApexCo.thatwasgeneratedearlier.AssumethatApexhasweightedaveragesharesoutstandingof156,250.PrepareapartialincomestatementshowingtheEPSforIncomefromOperationsandfortheotherspecialitems.,EarningsPerShare(EPS)-PartialIncomeStatement,*Roundingerror.,EarningsPerShare(EPS),Ifpreferredstockispresent,subtractpreferreddividendsfromnetincomepriortocomputingEPS.,EPSisrequiredtobereportedintheincomestatement.,AccountingforCashDividends,Declaredbyboardofdirectors.,Notlegallyrequired.,Createsliabilityatdeclaration.,RequiressufficientRetainedEarningsandCash.,DividendDates,DateofDeclarationBoardofdirectorsdeclaresthedividend.Recordaliability.,DividendDates,Ex-DividendDateThedaywhichservesastheownershipcut-offpointforthereceiptofthemostrecentlydeclareddividend.,DividendDates,X,DateofRecordStockholdersholdingsharesonthisdatewillreceivethedividend.(Noentry),DateofPaymentRecordthepaymentofthedividendtostockholders.,DividendDates,DividendDatesQuestion,OnJune1,1999acorporationsboardofdirectorsdeclaredadividendforthe2,500sharesofits$100parvalue,8%preferredstock.ThedividendwillbepaidonJuly15.WhichofthefollowingwillbeincludedintheJuly15entry?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.WhichofthefollowingwillbeincludedintheJuly15entry?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,Adjustretainedearningsretroactively.,Theadjustmentshouldbedisclosednetofanytaxes.,Thecorrectionofanerroridentifiedasaffectingn