lecture11 - ACCT 3220/Sep 17, 2010 Assets Liabs Equity 1...

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ACCT 3220/Sep 17, 2010 1 Assets Liabs Equity
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ACCT 3220/Sep 17, 2010 2 Preferred and Common Stock accounts are always reported at par value Additional paid-in capital picks up the amount paid in above par value Retained earnings collects the cumulative net income (or net losses) over the life of the firm, minus any dividends that have been paid out Accumulated other comprehensive income collects (primarily) cumulative unrealized gains and losses on fair valued items Treasury stock is the historical cost of stock that was repurchased from the shareholders by the firm at some point Current liabilities are those due to be paid within the next year (or next operating cycle) Current maturities of long-term debt is the portion of long-term debt that is due to be paid within the next year (or next operating cycle) Deferred income tax liabilities arise when there is a difference between tax rules and financial reporting rules. For example, the tax authority might allow an expense deduction when the financial statements don’t think it should. Example: if McDonald’s prepays rent,
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lecture11 - ACCT 3220/Sep 17, 2010 Assets Liabs Equity 1...

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