Summary-Ch15 - Summary: Ch. 15 Main issues: Accounting for...

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Summary: Ch. 15 Main issues: Accounting for treasury stocks using cost methods Difference accounting treatment between small stock dividends and large stock dividends, & stock split and stock dividends Accounting for dividend payments Financial statement presentation reflecting the change in the equity section 1. Corporate form and capital stock system 2. Corporate capital a. Two primary sources: Contributed capital (Paid-in capital) : Stockholders’ investment Retained earnings (Earned capital) b. Issuance of Stock : Par value stock - Paid-in capital in excess of par (premium above par) -Discount on stock (issued at less than par) No-par stock. The issuance of such stock avoids any contingent liability and also prevents par value from being used as a basis for fair value. In some cases, no-par stock is given a stated or minimum value. Lump sum sales. Either the proportional or the incremental method can be used to allocate proceeds among the different securities. Noncash stock transactions. When stock is issued for services or property other than cash the property or services should be recorded at either its fair market value or the fair market value of the stock issued, whichever is more clearly determinable. c.
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Summary-Ch15 - Summary: Ch. 15 Main issues: Accounting for...

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