1. What are the three primary components of the statement of owners’ equity and what information is disclosed in each component?
2. What is comprehensive income and how is it different than net income?
3. What is a prior period adjustment and why is it shown net of taxes?
You have just been hired by a midsized manufacturing firm and part of your new job is to determine how income should be measured for internal reporting purposes. Discuss the benefits and drawbacks of absorption, throughput, and variable costing, being careful to consider the ethical implications of each.
By consulting NEXIS, Disclosure, or a similar annual report database, determine the following:
A. How many companies reported discontinued operations during the period?
B. Of the companies that reported discontinued operations, did they report gains or losses?
C. How many companies reported extraordinary items during the period?
D. Of the companies that reported extraordinary items, did they report gains or losses?
E. How many companies reported a loss per share?