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A472 EX 2 SG - Chapter 15 Stockholde r's Equity The...

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Chapter 15: Stockholder’s Equity The Components of Capital: 2 Primary Sources of Equity (Assets – Liabilities = Equity) Variety of Ownership Interests: Capital Stock o Common stock represents basic ownership interest. -Bears ultimate risks of loss. -Receives the benefits of success. -Not guaranteed dividends nor assets upon dissolution. o Preferred stock is created by contract, when stockholders’ sacrifice certain rights in return for other rights or privileges, usually dividend preference. Accounting for the Issuance of Stock o BE15-1: Lost Vikings Corporation issued 300 shares of $10 par value common stock for $4,100. Prepare Lost Vikings’ journal entry. Journal Entry: Cash 4,100 Common Stock (300 x 10) 3,000 Add. PIC 1,100 No Par Stock To record shares without Par Value (No Par Value) (Shares x Price/Share) Cash 5,000 Common Stock – No Par Value 5,000 No Par Stock With Stated Value To record No Par Value Shares with a Stated Value (Treated Same as Par); Issued 1,000 shares with a $5 Stated value at $15/share for cash
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Cash 15,000
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