Intermediate Accounting 4

Earnings per share

(net income - preferred dividends)/ weighted average number of common shares outstanding

Component held for sale in the following year

1st: income or loss from operation of to e disposed component from the beginning until the end of the reporting period. 2nd: If impairment loss you add it back

Stereo shop sells audio equipment. The sale of stereo equipment would be included on the income statement as

A Revenue

Investing cash flows outflow

Acquisition of property, plant, and equipment, of investments in stocks and bonds AFS and HTM. Making loans to other entities and acquiring other businesses

Items that are unusual/ infrequent that have a material impact on a company's financial statements are reported when

After tax as a line item included in continuing operations

Multi-step income statement

An income statement that classifies items and uses subtotal for gross profit, operating income and income from continuing operations

Impairment lost

Book vale is more than next fair value it will be impaired. Next you net fair value - book value which will result in a negative number.

Operating cash flows outflow

Cash paid to suppliers, cash for operating expenses, interest, income taxes, securities classified as trading

Operating cash flows inflows

Cash received from customers, from interest, from dividends and from sale of securities classified as trading

Taxable income

Comprised of revenue, expenses, gains and losses

Component sold

Count income from operations of disposed component from the beginning of reporting period until disposal date.

What might be included in nonoperating income for a company that manufactures television

Gain from sale of land and interest income

Which items on an income statement are included in calculating income from continuing operations

Gains, expenses and income tax expense

Non operating income

Includes certain gains and losses and revenues and expenses related to peripheral or incidental activities of comany

What may be included in nonoperating income for a company that manufactures television

Interest income and gain from sale of land

Financing cash flow outflow

Paying cash dividends, repurchasing common stock, repaying short term loans, repaying long terms loans, including capital lease obligations

Operating activities

Payment of rent, collection of cash from customers, payment of interest on debt, receipt of interest on a note receivable, payment to suppliers of inventory

Pro forma earnings are management's view of

Permanent earnings

Financing cash flow inflow

Proceeds from issuing common and preferred stock, reissuing treasury stock, issuing short term debt, issuing long term debt.

Intraperiod tax allocation

Process of associating income tax effects with the income statement components that create those effects

Investing activities

Purchase of a bond of another company, sale of land for cash, receipt of interest on a note receivable

Diluted earnings per share

Reflects potential dilution, potential increase in number of common shares. Diluted should be less than or equal to basic earnings per shares.

Statement of cash flows and income statement are linked through

net income

Operating cash flows add to net income Indirect method

Decreases: Accounts receivable, inventories, prepaid expenses, deferred tax assets, Increases: Accounts payable, other accrued payable, income tax payable, deferred tax liability, interest payable, unearned revenue Losses from disposal of PPE , depreciation expenses, amortization expense

Janex company manufactures refrigerators. What would be included in nonoperating income on Janex's income statement

Interest expense

Financing activities

Issuance of common stock for cash, receipt of principal on a note receivable.

Some items reported in operating income

Selling expense, research and development expenses and revenue

Expenses

The cost of providing goods and services to customers

The profit on the sale of a delivery truck would be recorded on the income statement as

A gain

Expenses reported on an income statement can be classified by nature or by function under

IFRS

Operating income

Includes revenues and expenses directly related to principal revenue generating activities of company

Both basic and diluted earnings per share separately reported for

Income or loss from continuing operations Discontinued operations Net income or loss

Single-step income statement

Income statement that does not classify items as operating and nonoperating income

Operating cash flow deduct from net income Indirect method

Increases: Accounts receivable, inventories, prepaid expenses, deferred tax assets, Decreases: accounts payable, accrued payable, deferred tax liability, interest payable, unearned revenue Gains from PPE equity income from equity method less the cash dividends received during the period.

Revenues

Inflows of resources resulting from providing goods or services to customers

Other comprehensive income items include

Net unrealized holdings gains and losses on investments Gains and losses from and amendments to post retirement benefit plans Deferred gains from derivatives Gains from foreign currency translation

Investing cash flow inflows

Proceeds from sales of property, plant and equipment, from sale of investment in stocks and bonds, from the sale or redemption of investments in bonds classified as held to maturity, from collection of loans, selling components of the company

Discounted operations

Reported after income from continuing operations net of tax. The only below the line item. Disposal of components that represents a strategic shift that has or will have a major effect on a company's operations and financial results

If you include other comprehensive income on the income statement

You would change the name of the statement from income statement to statement of comprehensive income

Balance sheet and income statement are linked through

retained earnings