WRD_ch13 - 11-113-1Corporations: Organization, Stock...

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Unformatted text preview: 11-113-1Corporations: Organization, Stock Transactions, and Dividends1311-213-2Learning Objective 13-1Describe the nature of the adjusting process.Learning Objective 13-1Describe the nature of the adjusting process.Insert Chapter ObjectivesCorporations: Organization, Stock Transactions, and Dividends1Describe the nature of the corporate form of organization.2Describe the two main sources of stockholders equity.After studying this chapter, you should be able to:13-23Describe and illustrate the characteristics of stock, classes of stock, and entries for issuing stock.4Describe and illustrate the accounting for cash dividends and stock dividends.11-313-35Describe and illustrate the accounting for treasury stock transactions.6Describe and illustrate the reporting of stockholders equity.13-3Corporations: Organization, Stock Transactions, and Dividends (continued)7Describe the effect of stock splits on corporate financial statements.11-413-4Describe the natureof the corporate form of organization.113-411-513-5Characteristics of a CorporationA corporationis a legal entity, distinct and separate from the individuals who create and operate it. As a legal entity, a corporation may acquire, own, and dispose of property in its own name.111-613-6The stockholdersorshareholderswho own the stock own the corporation. Corporations whose shares of stock are traded in public markets are called public corporations. 1Public Corporations11-713-7Corporations whose shares are not traded publicly are usually owned by a small group of investors and are called nonpublicorprivate corporations. The stockholders of all corporations have limited liability.1Private Corporations11-813-8The stockholders control a corporation by electing a board of directors. The board meets periodically to establish corporate policy. It also selects the chief executive officer (CEO) and other major officers.1Board of Directors11-913-9EmployeesOfficersBoard of DirectorsOrganizational Structure of a Corporation1Exhibit 1Stockholders11-1013-10A corporation has separate legal existence from its owners.A corporation has transferable units of ownership.A corporation has limited stockholders liability.1Characteristics of a Corporation11-1113-11Advantages and Disadvantages of the Corporate Form1(continued)Exhibit 211-1213-121Advantages and Disadvantages of the Corporate Form(continued)Exhibit 2Explanation11-1313-13First step in forming a corporation is to file an application of incorporationwith the state.Forming a CorporationBecause state laws differ, corporations often organize in states with more favorable laws.More than half of the largest companies are incorporated in Delaware (see Exhibit 3 in Slide 14)....
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This note was uploaded on 04/13/2010 for the course ACTG 1B a taught by Professor 2 during the Spring '10 term at Foothill College.

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WRD_ch13 - 11-113-1Corporations: Organization, Stock...

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