Income Statement

For example, there are occasions when a company earns a significant, one-off amount of income from investment securities, a wholly owned subsidiary, or the sale of a large piece of equipment, property or land. 9250 OTHER NON-OPERATING EXPENSES. This cost center contains non-operating expenses not specifically required to be included in the above accounts. 9050 UNRESTRICTED INCOME FROM ENDOWMENT FUNDS. This account is credited with the unrestricted revenue and net realized (more…) […]

As an alternative to the Straight-Line approach, we can use an ‘Accelerated Depreciation’ method like the Sum of Year’s Digits (‘SYD’). In the section below, we cover two of the most common methods and their Cash Flow and Valuation impacts. By multiplying Depreciation Expense by the Income Tax Rate, you calculate the taxes saved (i.e. ‘Shielded’).
The concept was originally added to the methodology proposed by Franco Modigliani and Merton Miller for the […]

This was to provide an industry-neutral revenue recognition model to increase financial statement comparability across companies and industries. Public companies had to apply the new revenue recognition rules for annual reporting periods beginning after December 15, 2016. She is an expert in personal finance and taxes, and earned her Master of Science in Accounting at University of Central Florida.
Where is prepaid income recorded? When a company is paid before performing the work, (mo […]

To calculate the percent change in the operating income, will need income statements for the current year and prior year. In the current year, business XYZ earned total sales revenues of $200,000. For that period, the cost of goods sold was $40,000, rent was $12,000, insurance was $10,000 and wages was $60,000. The operating income is positioned as a subtotal on a multi-step income statement after all general and administrative expenses, and before interest income (more…) […]

You sell something, and your customer buys it and can do with it what they please . Without understanding the specific way you are going to sell your widget, it’s going to be tough to market it. Essentially, it’s how you are going to make money from your business.
Since then, we have built our wedding business and opened a new, larger wedding venue called Forest Lodge. We are excited to welcome even more brides and a new revenue stream for our company. It’s no great surprise t […]

To report noncash expenses on taxes, you need to calculate the total cost of the depreciation, amortization, and depletion of the item from that year. You then take this number and add it to your gross income number on your tax return.

Non-cash expenses, sometimes known as non-cash charges, are any expense recorded in your income statement that does not involve an outlay of cash. Non-cash transactions are always recorded in the income statement, as they directly impact total net income, but do […]

In regards to depreciation, salvage value is the estimated worth of an asset at the end of its useful life. If the salvage value of an asset is known , the cost of the asset can subtract this value to find the total amount that can be depreciated.
Accountants use the straight line depreciation method because it is the easiest to compute and can be applied to all long-term assets.Companies have several different options for depreciating the value of an asset over time, in accordance with (more&h […]

The premium can vary depending on many factors that are believed to affect the expected cost of future claims. Those factors can include the car characteristics, the coverage selected , the profile of the driver and the usage of the car . This covers all third-party liabilities and also covers the vehicle owner against the destruction of the vehicle by fire and theft of the insured vehicle. This kind of insurance and the two preceding types do not cover damage to the vehicle caused by the drive […]

Operations management team decides to use $25,000 in retained earnings to cover this shortage. The first piece of information you need to calculate net loss is revenue, which is the income generated by the business. If net income and net loss are the “bottom line,” then revenue is the “top line.”

An income statement is a financial report that takes the total of revenues and expenses for a certain period of time and calculates the bottom line. Ideally, the bottom line is […]

These discounts can include the promotional sales, coupons, volume purchases or other similar pricing strategies. Although trade discounts reduce the amount of gross profit on the sale of individual goods or services, companies often make this profit back through volume sales.
A trade discount is a routine reduction from the regular, established price of a product. The use of trade discounts allows a company to vary the final price based on each customer’s volume or status. A seller gives […]