Molson Coors Case Study
A. Major classifications of an income statement are:
• Income from continuing operations before tax
• Discontinued operations (net of tax)
• Net income from continuing operations
• Other revenues and expenses
• Operating income
• Extraordinary items (net of tax)
• Net income before extraordinary items
• Net income
• Cumulative effect of change in accounting principle (net of tax)
B. Companies various activities and transactions differ in stability and risks thereby indicating a need for information about various components of earnings. The requirement to provide classified income statements help users better assess the persistence of earnings and the risk related to various components of net income. Income statements may include non recurring items which should be considered in determining future earnings and or cash flows, moreover GAAP require separate disclosure of a number of these items, for instance discontinued operations, thereby giving a better picture of financial statements.
C. In accounting, current income statements do not reflect future expectations. Part of the roles of accounting information is for evaluation and valuation. Persistent income of a company will affect the assumptions of future earnings and or cash flows, which will help to better project a company’s valuation.
D. (INSERT ANSWER HERE)
E. (INSERT ANSWER HERE)
F. (INSERT ANSWER HERE)
G. (INSERT ANSWER HERE)
H. (INSERT ANSWER HERE)
I. (INSERT ANSWER HERE)
J. i. Non-operating items are the following: Interest expense-it is related to non-operating liabilities and Interest income- it is related to long-term loans. Debt extinguishment costs. Minority interest: the part of the net income destined to the minority owners is considered as non-operating. Discontinued operations. ii. 2007 2006
Interest expense (126462) (143070)
Interest income 26587 16289
Debt extinguishment costs (24478) 0
Other income 17662 17736
Non-operating items (106691) (109045)
Tax 28%
• Income from continuing operations before tax
• Discontinued operations (net of tax)
• Net income from continuing operations
• Other revenues and expenses
• Operating income
• Extraordinary items (net of tax)
• Net income before extraordinary items
• Net income
• Cumulative effect of change in accounting principle (net of tax)
B. Companies various activities and transactions differ in stability and risks thereby indicating a need for information about various components of earnings. The requirement to provide classified income statements help users better assess the persistence of earnings and the risk related to various components of net income. Income statements may include non recurring items which should be considered in determining future earnings and or cash flows, moreover GAAP require separate disclosure of a number of these items, for instance discontinued operations, thereby giving a better picture of financial statements.
C. In accounting, current income statements do not reflect future expectations. Part of the roles of accounting information is for evaluation and valuation. Persistent income of a company will affect the assumptions of future earnings and or cash flows, which will help to better project a company’s valuation.
D. (INSERT ANSWER HERE)
E. (INSERT ANSWER HERE)
F. (INSERT ANSWER HERE)
G. (INSERT ANSWER HERE)
H. (INSERT ANSWER HERE)
I. (INSERT ANSWER HERE)
J. i. Non-operating items are the following: Interest expense-it is related to non-operating liabilities and Interest income- it is related to long-term loans. Debt extinguishment costs. Minority interest: the part of the net income destined to the minority owners is considered as non-operating. Discontinued operations. ii. 2007 2006
Interest expense (126462) (143070)
Interest income 26587 16289
Debt extinguishment costs (24478) 0
Other income 17662 17736
Non-operating items (106691) (109045)
Tax 28%