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ACC 300 · Meeting 6 · Thu 9/17

The income statement

64 slides · Unit 2 · Optional Kieso: Chapter 3 and Chapter 17 · Meeting overview

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  1. Slide 1. Before-class trivia
  2. Slide 2. The income statement
  3. Slide 3. Prepare a multiple-step income statement
  4. Slide 4. Analyze operating performance
  5. Slide 5. Granite Harbor's reporting task
  6. Slide 6. Build the income statement
  7. Slide 7. Read the statement in layers
  8. Slide 8. Determine the reporting route
  9. Slide 9. Separate central operations from other items
  10. Slide 10. Classify an operating item
  11. Slide 11. Classify operating costs by function
  12. Slide 12. Classify every Granite Harbor cost
  13. Slide 13. Granite Harbor's gross profit
  14. Slide 14. Granite Harbor: operating income
  15. Slide 15. Where does the service cost belong?
  16. Slide 16. Client work is a direct cost
  17. Slide 17. Other income and net income
  18. Slide 18. A gain or loss on an asset sale
  19. Slide 19. Other items follow operating income
  20. Slide 20. A flood damaged the cabinet plant
  21. Slide 21. Granite Harbor: pretax income
  22. Slide 22. Income tax expense is a reported amount
  23. Slide 23. Granite Harbor: continuing income
  24. Slide 24. A qualifying discontinued operation
  25. Slide 25. Granite Harbor's net income
  26. Slide 26. Classify four recognized costs
  27. Slide 27. Direct and operating costs differ
  28. Slide 28. Place the remaining results
  29. Slide 29. These results enter different sections
  30. Slide 30. Granite Harbor's complete statement
  31. Slide 31. Prepare the prior-year statement
  32. Slide 32. Which subtotals change?
  33. Slide 33. Moving the loss changes two subtotals
  34. Slide 34. Prepare the prior-year statement
  35. Slide 35. Calculate the 2024 discontinued result
  36. Slide 36. Build 2024 through gross profit
  37. Slide 37. Continue through operating income
  38. Slide 38. Continue through pretax income
  39. Slide 39. Finish with the discontinued result
  40. Slide 40. Granite Harbor's complete 2024 statement
  41. Slide 41. Compare Granite Harbor's two years
  42. Slide 42. Compare profit margins
  43. Slide 43. Gross profit rate
  44. Slide 44. Granite Harbor's gross profit rate
  45. Slide 45. Operating margin
  46. Slide 46. Granite Harbor's operating margin
  47. Slide 47. Net profit margin
  48. Slide 48. Granite Harbor's net profit margin
  49. Slide 49. Compare the three profit margins
  50. Slide 50. How did operating margin change?
  51. Slide 51. The operating margin rose two points
  52. Slide 52. Other comprehensive income
  53. Slide 53. Other comprehensive income
  54. Slide 54. Net income or OCI?
  55. Slide 55. Granite Harbor: comprehensive income
  56. Slide 56. Current OCI and accumulated OCI
  57. Slide 57. Which result enters OCI?
  58. Slide 58. The qualifying hedge gain enters OCI
  59. Slide 59. Interpret the reported results
  60. Slide 60. What reported income can establish
  61. Slide 61. Evaluate the sales manager's claim
  62. Slide 62. What does the margin evidence support?
  63. Slide 63. The two margins describe different layers
  64. Slide 64. Classify discontinued operations

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Contents

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Before class, objectives, and reporting task Slides 1–5

  1. 1 Before-class trivia
  2. 2 The income statement
  3. 3 Prepare a multiple-step income statement
  4. 4 Analyze operating performance
  5. 5 Granite Harbor's reporting task

Revenue, cost of revenue, and operating income Slides 6–16

  1. 6 Build the income statement
  2. 7 Read the statement in layers
  3. 8 Determine the reporting route
  4. 9 Separate central operations from other items
  5. 10 Classify an operating item
  6. 11 Classify operating costs by function
  7. 12 Classify every Granite Harbor cost
  8. 13 Granite Harbor's gross profit
  9. 14 Granite Harbor: operating income
  10. 15 Where does the service cost belong?
  11. 16 Client work is a direct cost

Other items and the complete statement Slides 17–30

  1. 17 Other income and net income
  2. 18 A gain or loss on an asset sale
  3. 19 Other items follow operating income
  4. 20 A flood damaged the cabinet plant
  5. 21 Granite Harbor: pretax income
  6. 22 Income tax expense is a reported amount
  7. 23 Granite Harbor: continuing income
  8. 24 A qualifying discontinued operation
  9. 25 Granite Harbor's net income
  10. 26 Classify four recognized costs
  11. 27 Direct and operating costs differ
  12. 28 Place the remaining results
  13. 29 These results enter different sections
  14. 30 Granite Harbor's complete statement

Loss placement and prior-year preparation Slides 31–41

  1. 31 Prepare the prior-year statement
  2. 32 Which subtotals change?
  3. 33 Moving the loss changes two subtotals
  4. 34 Prepare the prior-year statement
  5. 35 Calculate the 2024 discontinued result
  6. 36 Build 2024 through gross profit
  7. 37 Continue through operating income
  8. 38 Continue through pretax income
  9. 39 Finish with the discontinued result
  10. 40 Granite Harbor's complete 2024 statement
  11. 41 Compare Granite Harbor's two years

Calculate and interpret profit margins Slides 42–51

  1. 42 Compare profit margins
  2. 43 Gross profit rate
  3. 44 Granite Harbor's gross profit rate
  4. 45 Operating margin
  5. 46 Granite Harbor's operating margin
  6. 47 Net profit margin
  7. 48 Granite Harbor's net profit margin
  8. 49 Compare the three profit margins
  9. 50 How did operating margin change?
  10. 51 The operating margin rose two points

Other comprehensive income Slides 52–58

  1. 52 Other comprehensive income
  2. 53 Other comprehensive income
  3. 54 Net income or OCI?
  4. 55 Granite Harbor: comprehensive income
  5. 56 Current OCI and accumulated OCI
  6. 57 Which result enters OCI?
  7. 58 The qualifying hedge gain enters OCI

Evaluate conclusions and look ahead Slides 59–64

  1. 59 Interpret the reported results
  2. 60 What reported income can establish
  3. 61 Evaluate the sales manager's claim
  4. 62 What does the margin evidence support?
  5. 63 The two margins describe different layers
  6. 64 Classify discontinued operations