Copyright  2006 Pearson Education Canada Inc. 10-1

Copyright  2006 Pearson Education Canada Inc Outline  Statement of Income  Single Step Format  Multiple Step Format  The Uniform System of Accounts for the Lodging Industry (USAL) 9 th Revised Edition  Special Income Statement Items  Comprehensive Income  Illustrative Income Statement

Copyright  2006 Pearson Education Canada Inc STATEMENT OF INCOME  Reflects results of operations of a company for a period of time  It might include special items such as gain or loss on sale of property or extraordinary items

Copyright  2006 Pearson Education Canada Inc SINGLE STEP FORMAT Arrives at net income in one step

Copyright  2006 Pearson Education Canada Inc MULTIPLE STEP FORMAT  Arrives at net income in many steps  Provides additional information for managerial purposes  USAL is an example of a multiple step income statement

Copyright  2006 Pearson Education Canada Inc The Uniform System of Accounts for the Lodging Industry (USAL) OPERATED DEPARTMENTS UNDISTRIBUTED OPERATING EXPENSES FIXED CHARGES

Copyright  2006 Pearson Education Canada Inc OPERATED DEPTS Revenue and expenses allocated to revenue producing departments USAL-9TH REVISED EDITION

Copyright  2006 Pearson Education Canada Inc USAL-9TH REVISED EDITION UNDISTRIBUTED OPERATING EXPENSES INCURRED FOR THE BENEFIT OF THE OPERATION

Copyright  2006 Pearson Education Canada Inc USAL-9TH REVISED EDITION NOT UNDER THE CONTROL OF OPER MGT RENT, INT DEP PROP TAX

Copyright  2006 Pearson Education Canada Inc Special Income Statement Items Extraordinary Items Gains and losses of an unusual and nonrecurring nature Discontinued Operations Gains and losses from the disposal of a business Cumulative effect of a change in accounting principle The effect of the change is reported in a separate section of the income statement and disclosed in footnotes

Copyright  2006 Pearson Education Canada Inc Comprehensive Income Change in equity from transactions and other events resulting from non-owner sources One Statement Approach The Two-Statement Approach The Statement of Changes in Equity Approach

Copyright  2006 Pearson Education Canada Inc Illustrative Income Statement Revenue Rooms $1,700 $1,500 $1,400 Food and Beverage Other $2,080 $2,750 $2,530 Expenses Rooms $500 $480 $460 Food and Beverage Other Expenses ,700 1,830 1,710 Income before Income Taxes and Extraordinary item Provision for Income Taxes Income before Extraordinary Item Extraordinary Loss (20) Net Income $260 $640 $570