22Q - Intermediate Accounting (Kieso)

Question

Discuss the appropriate treatment in the income statement for the following items:

(a) Loss on discontinued operations.

(b) Non-controlling interest allocation.

(c) Earnings per share.

(d) Gain on sale of equipment.

Step-by-Step Solution

Answer

a) Reported between income from continuing operations and net income

b) Reported after the net income

c) Reported after the non-controlling interest allocation

d) Reported in other revenues and gains section

Meaning of Income Statement

An Income statement includes four main items: revenue, gains, expenses, and losses. It is considered one of the three main financial statements.

Explanation of Loss on discontinued operations

A loss on discontinued operations is reported in the income statement as net of tax between income from continuing operations and net income.

Explanation of Non-controlling interest allocation

Non-Controlling interest allocation is reported in the income statement after the net income.

Explanation of Earnings per share

Earnings per share are reported in the income statement after the non-controlling interest allocation.

Explanation of Gain on sale of equipment

A gain on the sale of equipment is reported in the other revenues and gains in the income statement.