会计学：企业决策的基础（管理会计分册）（原书第19版）指导手册 -19e-Chap012-REVENUE RECOGNITION AND REPORTING RESULTS OF OPERATIONS

Chapter12—IncomeandChangesinRetainedEarnings

Chapter12—RevenueRecognitionandReportingResultsofOperations

12-

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12REVENUERECOGNITIONANDREPORTINGRESULTSOFOPERATIONS

ChapterSummary

Chapter12continuesthecoverageofstockholders’equitybutshiftsthefocusfrompaid-incapitaltoretainedearningsandtheincomestatement.Theprincipleofrevenuerecognitionisexplainedandhowitdrivesthecompany’sresultsofoperationsandtheimpactonfinancialposition.Thestudentisalreadyawarethatnetincomedrivesthechangesinretainedearnings.However,inanygivenperiodnetincomemayreflectunusualandnonrecurringevents.Webeginbyexplaininghowtodefinesuchitemsandhowtopresentthemsothattheincomestatementmaystillserveasthebasisforreasonableestimatesoffutureearnings.Thetwocategoriesofevents,whichrequirespecialtreatment,are(1)discontinuedoperations,and(2)unusualand/orinfrequentgainsandlosses.

Beforeturningtotheimpactofvariousdividendtransactions,webrieflyreviewbasicanddilutedearningspershare.TheemphasishereisoninterpretationoftheEPSfigures,sincethedetailedmechanicsofcalculatingthesemeasuresisbeyondthescopeofthefirstcourse.

Thesecondmajorsectionofthechapterexplainsanumberofstockholderequitytransactionsthataffectretainedearnings.Themostobviousexampleofsuchtransactionsisthedeclarationofacashdividend.Therequirementsfordistributingacashdividendareoutlinedasarethesignificantdatesinvolvedinthedistributionofthedividend.Stockdividendsarediscussedsincetheytooresultinareductioninretainedearnings.Thisportionofthechaptercloseswithabriefexplanationofpriorperiodadjustmentstoretainedearnings.

AdditionaltopicscoveredinChapter12includeanintroductiontocomprehensiveincomeandareviewofthestatementofstockholders’equity.

LearningObjectives

Explaintheprincipleofrevenuerecognition,includingtheconditionsthatmustbemetforrevenuetoberecognizedinthefinancialstatements.

Describehowirregularincomeitems,suchasunusualand/orinfrequentitemsanddiscontinuedoperations,arepresentedintheincomestatement.

Computeearningspershareanddistinguishbetweenbasicanddilutedearningspershare.

Accountforcashdividendsandstockdividends,andexplaintheeffectsofthesetransactionsonacompany’sfinancialstatements.

Describeandprepareastatementofretainedearnings.

Definepriorperiodadjustments,andexplainhowtheyarepresentedinfinancialstatements.

Definecomprehensiveincome,andexplainhowitdiffersfromnetincome.

Describeandprepareastatementofstockholders’equityandthestockholders’equitysectionofthebalancesheet.

Illustratestepsmanagementmighttaketoimprovetheappearanceofthecompany’snetincome.

BriefTopicalOutline

Revenuerecognition

Revenueasadriver

Revenueasacontract

Performanceobligations

Otherrevenuerecognitionissues

Reportingtheresultsofoperations

Developingpredictiveinformation

Reportingirregularitems:anillustration

Continuingoperations

Unusualand/orinfrequentgainsandlosses—seeYourTurn(page530)

Earningspershare(EPS)

Preferreddividendsandearningspershare

Presentationofearningspershareintheincomestatement

Basicanddilutedearningspershare—seePathwaysConnection,InternationalCaseinPoint(page532),andYourTurn(page533)

Othertransactionsaffectingretainedearnings

Cashdividends

Dividenddates

Liquidatingdividends

Stockdividends

Entriestorecordastockdividend

Reasonsforstockdividends—seeCaseinPoint(page538)

Distinctionbetweenstocksplitsandstockdividends

Statementofretainedearnings

Priorperiodadjustments

Restrictionsofretainedearnings

Comprehensiveincome

Statementofstockholders’equity

Stockholders’equitysectionofthebalancesheet—seeEthics,Fraud,&CorporateGovernance(page542)

Concludingremarks

TopicalCoverageandSuggestedAssignments

ClassMeetingsonChapter

TopicalOutlineCoverage

DiscussionQuestions*

Brief

Exercises*

Exercises*

Problems*

CriticalThinkingCases*

1

A

1,2,3,5

1,3,4,5

1,3

1,2,3,6

1

2

B–D

7,8,10,12,13

7,8,10

4,6,7,10

4

*Homeworkassignment(tobecompletedpriortoclass)

CommentsandObservations

TeachingObjectivesforChapter12

Inthischapter,wediscussavarietyofeventsandtransactionsthataffectretainedearnings.Intheclassroom,ourobjectivesareto:

Explainrevenuerecognition,includingtheconditionsthatmustbemetforrevenuetoberecognizedinthefinancialstatement.

Explainthepurposeofreportingirregulareventsseparatelyfromnormalandrecurringbusinessactivities.

Carefullydefinediscontinuedoperationsandunusualand/orinfrequentgainsandlosses.Reviewanddiscussthefinancialstatementpresentationofeachcategoryofevent.

Illustratethecomputationofearningspershare,andbrieflydiscussthedistinctionbetweenbasicanddilutedearnings.

Discussthenatureandpurposeofcashdividendsandstockdividends,emphasizingtheeffectsupontotalstockholders’equityandtheprobableeffectsuponstockprice.Illustratethejournalentriesforeachoftheevents.

Explainthenatureofpriorperiodadjustments.Discussprobabilityofoccurrencein publiclyownedandcloselyheldcorporations.

Reviewanddiscussthestatementofretainedearnings.

Explainthenatureofcomprehensiveincome.

Reviewthestatementofstockholders’equityportrayedasan“expanded”statementofretainedearnings.

GeneralComments

Chapter12beginswiththeprincipleofrevenuerecognitionasadriverofacompany’sresultsofoperationsandtheimpactonfinancialposition.Whilerevenuerecognitionismostobviousintheincomestatement,itisalso(1)animportantdriverforallfinancialstatements(notlimitedtotheincomestatement)and(2)performanceobligationsareparticularlyimportantinrecognizingrevenue.

Manyaccountingfacultyaskuswhywecoverdiscontinuedoperationsintheintroductorycourse.Ouransweristhatinthiseraof“corporaterestructuring,”discontinuedoperationsarecommonplaceinthefinancialstatementsofpubliclyownedcorporations.(Priorperiodadjustments,bycomparison,arevirtuallynonexistentinthefinancialstatementsoflargecorporations.)

Indiscussingirregularevents,wefocusupontheappropriatefinancialstatementpresentationratherthanupontherecordingoftransactions.Mostofthesetransactionsarerecordedinthesamemannerasordinarytransactions.Allocationsofrevenue,expenses,andgainsandlossestosuchspecialcategoriesas“continuingoperations,”“discontinuedoperations,”and“unusualand/orinfrequentgainsandlosses”aremadeonthefinancialstatementsattheendoftheperiod.Thetaxeffectsrelatingtotheseitemsalsoaredeterminedandallocatedasneededforfinancialstatementpreparationratherthanthroughjournalentries.

Weconsiderthesefinancialstatementpreparationproceduresbeyondthescopeoftheintroductorycourse.Entriestorecordaccountingchangesandpriorperiodadjustmentsalsoarebeyondthescopeoftheintroductoryaccountingcourse.Anyonewithresponsibilityforrecordingsuchtransactionsneedsmoreofanaccountingbackgroundthananintroductorycoursecanprovide.Anyuseroffinancialstatements,however,needstounderstandthenatureoftheseunusualitemsinordertointerpretproperlytheoperatingresultsofthecurrentperiod.

Severalofourproblemsareintendedtoillustratethepresentationofirregulareventsinfinancialstatements,includingProblems1,2,and3.Theseproblemsaresuccessivelycomprehensiveandchallenging.WealsorecommendclassdiscussionofCase1involvingseveralwell-knowncorporations.

Indiscussingearnings-per-share,weconsideraconceptualunderstandingimportant,butregardmostofthemechanicsofper-sharecomputationsasbeyondthescopeofthecourse.Forinstance,wediscusstheconceptofdilutedearnings-per-share,butdonotgetintoanycomputations.Wedo,however,reviewExercise6.Thisexercisehelpsclarifytheideathatearnings-per-shareisbasedonlyupontheincomeapplicabletocommonstock.

The“stockholders’equity”portionofthischapterincludesavarietyofshorttopics.Wefindanin-classreviewofExercise10isanefficientwaytocovermanyofthesetopics.Asanoverview,weuseProblem5,whichalsoacquaintsstudentswiththeunofficial“statement”ofstockholders’equity.(Note:Thesuggestedexercises,problems,andcasesarealsolistedintheassignmenttableabove.Ifyouareplanningtousethemasadiscussion,youmaywishtoassignotherhomework.)

SupplementalExercises

GroupExercise

Visitthe

SECwebsite

andretrievetheannualreport10-KfilingforthefiscalyearendedJune30,2016.LocatetheNote14–RestructuringChargesandfindthenoteregardingthe2016restructuring.DoesMicrosoftreporttheirrestructuringchargeasa“discontinuedoperation”orasanordinaryoperatingexpense?Whatmightjustifythisreporting?Whatelsedidyoulearnaboutthechargesreportedontheincomestatement?

InternetExercise

Visitthe

SECwebsite

orthecompanies’corporatewebsitesinordertoretrievethemostrecentannualreportfilingforthefollowing:

Coca-Cola(tickersymbolKO)

PepsiCo(tickersymbolPEP)

Locatetheconsolidatedstatementofstockholders’equity.Answerthefollowingquestionsrelatedtoeachcompany:

Dotheyreportcommonstock,preferredstock,orboth?

Dotheyreporttreasurystock?Ifso,howmuch?

Didtheypaydividendsduringtheyear?Ifso,howmuch?

Didanyitemsotherthannetincomeanddividendsimpactretainedearnings?Ifso,describe.

CHAPTER12 NAME #

10-MINUTEQUIZA SECTION

Indicatethebestanswerforeachquestioninthespaceprovided.

BeckCorporationdeclareda2-for-1commonstocksplit,butthistransactionwaserroneouslyrecordedasa100%commonstockdividend.Asaresult:

Thecommonstockaccountisoverstated.

Thetotaldollaramountofstockholders’equityisoverstated.

Thecorporaterecordsdonotshowthecorrectnumberofsharesofcommonstockoutstanding.

Theparvaluepershareisunderstated.

Fuller

ADVANCE\L1.90

Mfg.’sfinancial

ADVANCE\L1.90

statements

ADVANCE\L1.90

for

ADVANCE\L0.95

the

ADVANCE\L1.90

current

ADVANCE\L1.90

year

ADVANCE\L0.95

include

ADVANCE\L0.95

the

ADVANCE\L1.90

following:

Incomefromcontinuingoperations $663,200

Priorperiodadjustment(increaseinprior-yearnetincome,netoftaxes) 180,000

Cashdividendspaidtopreferredstockholders 196,800

Gainfromdiscontinuedoperations(netoftaxes) 433,600

Unusualloss 174,400

Onthebasisofthisinformation,netincomeforthecurrentyearis:

a $488,800. b $922,400. c $725,600.d $1,102,400.

Thefollowingtwoitemsaredisclosedinthestockholders’equitysectionofCortCorporation’scurrentyearbalancesheet:

Treasurystock(500shares,atcost) $50,000

Additionalpaid-incapital:treasurystocktransactions 22,500

Ifthecompanyhadreacquired3,000sharesoftreasurystockinFebruaryofthecurrentyearandhasrecordednoothertreasurystocktransactions,thensomeofthetreasurystockmusthavebeensoldduringthecurrentyearfor:

$9pershareaboveitsparvalue.

$9pershare.

$109pershare.

$109pershareaboveitscost.

Atthebeginningofthecurrentyear,BardCorporationhad400,000sharesof$1parcommonstockoutstandingandhadretainedearningsof$11,000,000.Duringtheyear,thecompanyearned$5,000,000,declareda5%stockdividendwhenthepriceofstockwas$25pershare,andpaidayear-endcashdividendof$2pershare.(Thecashdividendwaspaidafterthestockdividendhadbeendistributed.)BardCorporation’sretainedearningsattheendoftheyearamountto:

a $16,000,000. b $14,660,000. c $14,320,000. d$14,700,000

DonnellCorp.had100,000sharesof8%preferredstock,$100par,and500,000sharesof$1parcommonstockoutstandingthroughouttheyear.Netincomefortheyearwas$4,800,000,andDonnelldeclaredanddistributedacashdividendof$4pershareonitscommonstock.Earningspershareamountedto:

a $8.80. b $4.00. c $8.00. d $2.00.

CHAPTER12 NAME #

10-MINUTEQUIZB SECTION

Thestockholders’equitysectionofthebalancesheetofGlobalPublishingatDecember31,Year1,appearsasfollows:

Stockholders’equity:

5%preferredstock,$100par,

50,000sharesauthorized,___?__sharesissued $1,200,000

Commonstock,$2par,500,000sharesauthorized,

140,000sharesissued,ofwhich___?areheldintreasury 280,000

Additionalpaid-incapital:

Fromissuanceofpreferredstock 288,000

Fromissuanceofcommonstock 840,000

Fromtreasurystocktransactions 16,000

Fromcommonstockdividends 400,000

Totalpaid-incapital $3,024,000

Retainedearnings($112,000equaltocostoftreasury

stockisnotavailablefordividends) __880,000

$3,904,000

Less:Treasurystock(atcost:14,000commonshares) (112,000)

Totalstockholders’equity $3,792,000

Answerthefollowingquestionsbasedonthestockholders’equitysectiongivenabove.ThecompanyhadnotreasurystockpurchasesbeforeYear1.

Refertotheabovedata.Whatwastheaverageissuepricepershareofpreferredstock?

a $80. b $100. c $124. d $148.

Refertotheabovedata.Howmanysharesofcommonstockareoutstanding?

a 140,000. b 126,000. c 500,000. d 120,000.

Refertotheabovedata.Asmallstockdividendof5,000shareswasdeclaredanddistributedduringYear1.Whatwasthemarketpricepershareonthedateofdeclaration?

a $82pershare. b$80pershare. c $2pershare. d $78pershare

Refertotheabovedata.IfGlobalPublishinghadreacquired16,000sharesoftreasurystockearlyinYear1,thensometreasurystockmusthavebeensoldduringYear1for:

a $5pershare. b $8pershare. c $6pershare. d $16pershare.

Refertotheabovedata.Assumethatallremainingtreasurystockisreissuedatapriceof$18pershareinJanuaryofYear2.WhatamountshouldbecreditedtotheaccountAdditionalPaid-inCapital:TreasuryStockTransactionsinthejournalentrytorecordthistransaction?

a $96,000. b $140,000. c $112,000. d $288,000.

CHAPTER12 NAME #

10-MINUTEQUIZC SECTION

Thestockholders’equitysectionofthebalancesheetofXanaduFashions,Inc.,atDecember31,Year1appearsasfollows:

Stockholders’equity:

7%preferredstock,$100par,callableat$105,

50,000sharesauthorized,40,000sharesissued $4,000,000

Commonstock,$2par,600,000sharesauthorized,

450,000sharesissued,ofwhich30,000areheldintreasury 900,000

Additionalpaid-incapital:

Fromissuanceofpreferredstock 640,000

Fromissuanceofcommonstock 1,890,000

Fromtreasurystocktransactions 60,000

Fromcommonstockdividends __450,000

Totalpaid-incapital $7,940,000

Retainedearnings($240,000equaltocostoftreasury

stockisnotavailablefordividends) 3,600,000

$11,540,000

Less:Treasurystock(atcost:30,000commonshares) __(240,000)

Totalstockholders’equity $11,300,000

Answerthefollowingquestionsbasedonthestockholders’equitysectiongivenabove.ThecompanypurchasednotreasurystockbeforeYear1.

Refertotheabovedata.Whatwastheaverageissuepricepershareofpreferredstock?

Refertotheabovedata.Howmanysharesofcommonstockareoutstanding?

Refertotheabovedata.Asmallstockdividendof20,000shareswasdeclaredanddistributedduringYear1.Whatwasthemarketpricepershareonthedateofdeclaration?

Refertotheabovedata.IfXanaduFashionshadreacquired35,000sharesoftreasurystockearlyinYear1,computethepricepershareforwhichthereissuedtreasurystockwassold.

Refertotheabovedata.Assumeallremainingtreasurystockisreissuedatapriceof$24pershareinJanuaryofYear2.Preparethejournalentrytorecordthistransaction:

CHAPTER12 NAME #

10-MINUTEQUIZD SECTION

ShownbelowisinformationrelatingtooperationsofR.Brook,Inc.forthecurrentyear:

Continuingoperations:

Netsales $2,750,000

Costsandexpenses(includingincometaxes) 2,125,000

Otherdata:

Currentyearlossgeneratedbysegmentofthebusiness

discontinuedinJuly(netofincometaxbenefit) 207,500

Gainondisposalofdiscontinuedsegment(netof

incometax) 137,500

Priorperiodadjustment(decreaseinprioryear’sdepreciation

expense,netofincometaxes) 45,000

Unusualloss 17,500

Cashdividendsdeclared($1.50pershare) 150,000

Inthespaceprovided,completetheincomestatementforR.Brook,Inc.,includingearningspersharefigures.R.Brook,Inc.has100,000sharesofasingleclassofcommonstockoutstandingthroughouttheyear.

R.BROOK,INC.

CondensedIncomeStatement

FortheYearEndedDecember31,XX

SOLUTIONSTOCHAPTER1210-MINUTEQUIZZES

QUIZA

A

B

C

B

C

QUIZB

C

B

A

D

B

QUIZC

Averageissuepricepershareofpreferredstock:$116pershare

($4,000,000+$640,000)/40,000shares=$116pershare

420,000sharesofcommonstockoutstanding:450,000sharesissued–30,000heldintreasury=420,000shares

Marketpricepershareonstockdividenddeclarationdate:$24.50.

$450,000/20,000shares=$22.50marketvalueinexcessofpar

$2parvalue+$22.50excessoverpar(above)=$24.50pershare

5,000sharesoftreasurystockreissuedat$20pershare

5,000sharestreasurystockreissued(35,000–30,000remaining)

$60,000/5,000shares=$12pershareinexcessofcostwasreceivedwhentheshareswerereissued.

$240,000/30,000sharesleft=$8cost+$12(above)=$20reissueprice

Cash(30,000shares$24pershare) 720,000

TreasuryStock 240,000

AdditionalPaid-InCapital:Treasury

StockTransactions 480,000

QUIZD

R.BROOK,INC.

CondensedIncomeStatement

FortheYearEndedDecember31,XX

Netsales $2,750,000

Costandexpenses(includingapplicable

incometaxes) (2,125,000)

Incomefromcontinuingoperations $625,000

Discontinuedoperations:

Operatingloss(netofincometaxbenefits) $(207,500)

Gainondisposal(netofincometaxes) 137,5