revenues and expenses must be made in an income statement. To indicate how much of previous revenue was distributed to the owners of the business in the form of dividends, and how much was retained in the business to allow for future growth, a retained earnings statement is presented. To show where a business obtained cash during a period of time and how that cash was used, a statement of cash flows is presented.” As you can see, each area of a business is accounted for through financial statements. Now
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The Four Financial Statements In accounting there are four statements used to display a business’s finances. They are the income statement, retained earnings statement, balance sheet, and statement of cash flows. These charts interconnect to each other to show a specified amount of time. Without one of them, an accountant cannot see accurately the state of a business. Accountants are not the only people who find this information useful. Internal and external users can find the information
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CHAPTER 7 EARNINGS PER SHARE PROBLEMS 7-1 Case A |600,000 x 12/12 x 110% |660,000 | |48,000 x 3/12 |(12,000) | | |648,000 | Case B |4,000,000 x 12/12 |4,000,000 | |1,000,000 x 9/12 |750,000 | |500,000 x 6/12
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the income statement, retained earnings statement, balance sheet, and the statement of cash flows. Each statement serves its own unique purpose, yet has a direct relationship with each of the other statements. Each can operate independently, or be used in conjunction with its other associated statements. The income statement reports the success or failure of the company's operations over a period of time by reporting its revenues and expenses. The retained earnings statement shows the amounts and
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the effectiveness of the decisions being made (Kimmel, Weygandt, & Kieso, 2003). Among the reports in a financial department are the income statement, balance sheet, cost-volume-profit income statement, statement of cash flows, and a retained earnings statement. These types of financial reports are among the essential tools that are necessary in managerial accounting for business decision making. The income statement can be a very useful tool to illustrate the company’s expenses such manufacturing
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Module 12 Problem 17-9 (a) Basic earnings per share: Income applicable to common shares 1,750,000-280,000 x 0.8=1,526,000 Weighted average number of common shares: 1,800,000 Earnings per share: 0.85 (b) 1 | For options:number of shares under option | 50,000 | | option price per share | 12 | | proceeds upon assumed
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prior earnings statement could still be relied upon. The actual changes in the financial statements related to this interest expense revision were not disclosed in this article. However, the accounting revision affected previous and projected earnings per share, and seemed to scare investors. Royal Caribbean earned 43 cents per share for the quarter ended June 30, but would have earned 47 cents per share without the accounting revision. Also, the company has reduced its full-year earnings expectations
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$455,000 b) What entry (ies) is necessary to adjust the accounting records for the change in accounting policy? Construction in Process 170,000 Deferred Tax Liability ($170,000 X 35%) 59,500 Retained Earnings 110,500* *($170,000 X 65% = $110,500) Question 2 Ramirez Co. decides at the beginning of 2010 to adopt the FIFO method of inventory valuation. Ramirez had used the average cost (AC) method for financial reporting since its
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were from the correction of an error should it appear on the statement of retained earnings and any comparative numbers that would appear in the financial statements. If the assessment was due to an error, details should be discussed in the financial statement notes. 3. The effect of the error at December 31, 2010, should be shown as an adjustment of the beginning balance of retained earnings on the retained earnings statement (net of applicable income taxes). The current year's expense should be
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Good accounting gone bad Principal of Accounting 1 1. Anatomy of a financial sheet a. Assets b. Revenue c. Expenses 2. Financial statement errors a. Enron b. WorldCom c. North Babylon Union Free School District 3. Sarbanes Oxley Act 4. Corporate Accountability Accounting has been defined as "the language of business" because it is the basic tool for recording, reporting, and evaluating economic events and transactions that affect organizations. For the financial
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