chap11 - * declaration date * record date ( ex-dividend...

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1 Acct 284 Chap. 11 CHAPTER 11 Reporting and Interpreting Owners’ Equity
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2 Acct 284 Chap. 11 Shares of Capital Stock authorized issued outstanding unissued treasury
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3 Acct 284 Chap. 11 Types of Capital Stock common stock preferred stock par value stock legal capital no par value stock *cumulative preferred stock noncumulative preferred stock
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4 Acct 284 Chap. 11 Treasury Stock Treasury stock results when a company buys its own stock in the market The purchase of treasury stock reduces assets and equity Treasury stock (debit, increase)$ 500 Cash (credit, decrease) 500 The reissuance increases assets and equity Cash (debit, increase) $ 700 Treasury stock (credit, decrease) 500 Add. PIC – TS (credit, increase) 200
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5 Acct 284 Chap. 11 Stockholders’ Equity Contributed Capital: Preferred Stock Common Stock Additional Paid In Capital (Capital in Excess of Par) Retained Earnings Minus: Treasury Stock Plus/Minus: Accumulated comprehensive income Total Stockholders Equity
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6 Acct 284 Chap. 11 Cash Dividends Relevant dates:
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Unformatted text preview: * declaration date * record date ( ex-dividend date 2 days before) * payment date Restrictions on retained earnings Dividends on preferred stock: * current dividend preference * cumulative dividend preference * dividends in arrears 7 Acct 284 Chap. 11 Ratio Analysis Dividend yield: DY = Dividends per share Market price per share Earnings per share: EPS = Income _ Avg. Number of Shares of Common Stock Outstanding * EPS is only ratio required to be reported by SEC. DO NOT CALCULATE! 8 Acct 284 Chap. 11 Stock Dividends and Stock Splits Why issue stock dividends and stock splits? What happens when we issue stock dividends and stock splits? Stock dividend Retained earnings (decrease) $500 Common stock (increase) 500 This reduces retained earnings and increase stock outstanding with no effect on income or assets Stock split No entry therefore nothing is affected expect the par value and shares outstanding...
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This note was uploaded on 09/23/2009 for the course ACCT 284 taught by Professor Clem during the Spring '08 term at Iowa State.

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chap11 - * declaration date * record date ( ex-dividend...

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