Counting Crows Inc. provided the following information for the year 2014. Accounting Prepare (a) a single-step income
Question:
Counting Crows Inc. provided the following information for the year 2014.
Accounting
Prepare (a) a single-step income statement for 2014, (b) a retained earnings statement for 2014, and (c) a statement of comprehensive income using the two statement format. Shares outstanding during 2014 were 100,000.
Analysis
Explain how a multiple-step income statement format can provide useful information to a financial statement user.
Principles
In a recent meeting with its auditor, Counting Crows’ management argued that the company should be able to prepare a pro forma income statement with some one-time administrative expenses reported similar to extraordinary items and discontinued operations. Is such reporting consistent with the qualitative characteristics of accounting information as discussed in the conceptual framework? Explain.
Step by Step Answer:
Intermediate Accounting
ISBN: 978-1118147290
15th edition
Authors: Donald E. Kieso, Jerry J. Weygandt, and Terry D. Warfield