AC 101 Fall 2007 Ch 12

AC 101 Fall 2007 Ch 12 - Stockholders Equity: The Residual...

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Stockholders’ Equity: The Residual Interest Chapter Twelve Prepared by: Sarita Sheth Santa Monica College
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Chapter Twelve Objectives 1. Construct the entries for stock issuance. 2. Understand the difference between common and preferred stock. 3. Distinguish between cash and stock dividends and understand the accounting treatments of each. 4. Appreciate why firms repurchase stock and construct entries for such repurchases. 5. Understand disclosure requirements for employee stock options and related compensation expense. 6. Recognize the nature of convertible securities and the accounting issues. 7. Understand the earnings per share and its role in valuation.
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Remember? Stockholders’ Equity Statement details the shareholders (owners) claims to the firm’s assets. These claims can be broken into two categories: Contributed Capital Undistributed Income Par Value Stock- stated value of stock Additional Paid In Capital - excess paid over par value Retained Earnings - accumulated net income less dividends paid to shareholders. Other Comprehensive Income – reflects various direct adjustments to stockholders’ equity like unrealized holding gains and losses on marketable securities.
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Question Time Increases to equity include: a) treasury stock repurchases b) net income c) stock dividend distributions d) issuance of note payables
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Question Time Increases to equity include: a) treasury stock repurchases b) net income c) stock dividend distributions d) issuance of note payables
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Common Stock (CS) CS holders are also known as residual interest holders. After creditors and preferred stockholders, common stock holders can claim the assets.
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This note was uploaded on 09/30/2008 for the course AC 101 taught by Professor Ammons during the Spring '08 term at Quinnipiac.

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AC 101 Fall 2007 Ch 12 - Stockholders Equity: The Residual...

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