diate Accounting 4 The Income Statement and Income Recognition Income from continuing operations Income from continuing operations summarizes the income from usual and recurring operating activities. It includes Sales revenue(net) Cost of goods sold Operating expenses Other items Income tax expense related to continued operations
Income from continuing operations ➢ Sales revenue (net) ➢ Cost of goods sold ➢ Operating expenses ➢ Other items ➢ Income tax expense related to continued operations Income from continuing operations summarizes the income from usual and recurring operating activities. It includes : Intermediate Accounting 4 The Income Statement and Income Recognition
diate Accounting 4 The Income Statement and Income Recognition Income from continuing operations Determining subtotals Gross profit: Revenue-Cost of goods sold perating income: Gross profit-Operating expenses
Income from continuing operations Determining Subtotals Gross profit: Revenue – Cost of goods sold Operating income: Gross profit – Operating expenses Intermediate Accounting 4 The Income Statement and Income Recognition
diate Accounting 4 The Income Statement and Income Recognition Income from continuing operations Determining Subtotals ncome from continuing operations before income taxes. Operating income Other revenues and gain Other expenses and losses Income from continuing operations Income from continuing operations before income taxes- Income taxes on continuing operations
Income from continuing operations Determining Subtotals Income from continuing operations before income taxes: Operating income + Other revenues and gain – Other expenses and losses Income from continuing operations: Income from continuing operations before income taxes – Income taxes on continuing operations Intermediate Accounting 4 The Income Statement and Income Recognition
diate Accounting 4 The Income Statement and Income Recognition Sales revenue(net) Sales revenue reports the total sales to customers for the period less any sales returns and allowances or discounts
Sales revenue (net) Sales revenue reports the total sales to customers for the period less any sales returns and allowances or discounts. Intermediate Accounting 4 The Income Statement and Income Recognition
Intermediate Accounting 4 The Income Statement and Income Recognition Cost of Goods sold Beginning inventory t net purchases Freight-in t Other inventory acquisition costs Cost of goods available for sale Ending inventory Cost of goods sold
Cost of Goods Sold Intermediate Accounting 4 The Income Statement and Income Recognition Beginning inventory + Net purchases + Freight-in + Other inventory acquisition costs = Cost of goods available for sale – Ending inventory = Cost of goods sold