Questions from Financial Reporting

Q: An income statement is a summary of revenues and expenses and gains

An income statement is a summary of revenues and expenses and gains and losses, ending with net income for a specific period of time. Indicate the two traditional formats for presenting the income sta...

Q: Melcher Company reported earnings per share in 2011 and 2010 of $

Melcher Company reported earnings per share in 2011 and 2010 of $2.00 and $1.60, respectively. In 2012, there was a 2-for-1 stock split, and the earnings per share for 2012 were reported to be $1.40....

Q: Comment on your ability to determine a firm’s capacity to make distributions

Comment on your ability to determine a firm’s capacity to make distributions to stockholders, using published financial statements.

Q: Management does not usually like to tie comprehensive income closely with the

Management does not usually like to tie comprehensive income closely with the income statement. Comment.

Q: Review the consolidated income statement, expenses analyzed by function (Exhibit

Review the consolidated income statement, expenses analyzed by function (Exhibit 4-12). Comment on similarities and differences to the U.S. GAAP income statement.

Q: What are extraordinary items? How are they shown on the income

What are extraordinary items? How are they shown on the income statement? Why are they shown in that manner?

Q: Which of the following would be classified as extraordinary? a

Which of the following would be classified as extraordinary? a. Selling expense b. Interest expense c. Gain on the sale of marketable securities d. Loss from flood e. Income tax expense f. Loss...

Q: A health food distributor selling wholesale dairy products and vitamins decides to

A health food distributor selling wholesale dairy products and vitamins decides to discontinue the division that sells vitamins. How should this discontinuance be classified on the income statement?

Q: Why are unusual or infrequent items disclosed before tax?

Why are unusual or infrequent items disclosed before tax?

Q: In the future, we should expect few presentations of a “

In the future, we should expect few presentations of a “cumulative effect of change in accounting principle.” Comment.