Module09 - Module 9 Reporting and Analyzing Owner Financing...

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1 Module 9 Reporting and Analyzing Owner Financing Stockholders’ Equity Total stockholders’ equity is divided into two components: 1. Contributed capital - proceeds received by the issuing company from original stock issuances, net of the amounts paid to repurchase shares of the issuer’s stock from its investors. 2. Earned capital - Retained earnings and accumulated other comprehensive income (AOCI). Components of Stockholders Equity
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2 Authorized Shares ± 607.0601 Authorized shares. -- ± (1) The articles of incorporation must prescribe the classes of shares and the number of shares of each class that the corporation is authorized to issue. ± If more than one class of shares is authorized, the articles of incorporation must prescribe a distinguishing designation for each class, and prior to the issuance of shares of a class the preferences, limitations, and relative rights of that class must be described in the articles of incorporation. ± All shares of a class must have preferences, limitations, and relative rights identical with those of other shares of the same class except to the extent otherwise permitted by s. 607.0602 or s. 607.0624. Authorized Shares 607.0601 ± 2) The articles of incorporation must authorize: ± (a) One or more classes of shares that together have unlimited voting rights, and ± (b) One or more classes of shares (which may be the same class or classes as those with voting rights) that together are entitled to receive the net assets of the corporation upon dissolution. Authorized Shares 607.0601 ± (3) The articles of incorporation may authorize one or more classes of shares that: ± (a) Have special, conditional, or limited voting rights, or no right to vote, except to the extent prohibited by this act; ± (b) Are redeemable or convertible as specified in the articles of incorporation:
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3 Types of Stock ± There are two classes of stock: 1. Preferred Stock 2. Common Stock ± Preferred stock preferences: 1. Dividend preference – preferred shareholders receive dividends on their shares before common shareholders do.
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Module09 - Module 9 Reporting and Analyzing Owner Financing...

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