ch18-5th_outline - 1 CHAPTER 18 Spiceland, Sepe, Nelson,...

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1 CHAPTER 18 Spiceland, Sepe, Nelson, and Tomassini - Fifth Edition SHAREHOLDERS' EQUITY Revised January 2010 Learning Objectives 1. Define stockholders' equity and distinguish among contributed capital, retained earnings, and accumulated other comprehensive income. 2. Identify the components of other comprehensive income. 3. Distinguish between comprehensive income created during the year and accumulated other comprehensive income. 4. Describe the unique characteristics and advantages and disadvantages of the corporate form of business organization. 5. Identify the basic shareholder rights of common shareholders and preferred shareholders. 6. Define the following with respect to preferred stock: cumulative dividend preferences, participating dividend preferences, convertible preferred stock, callable preferred stock, redeemable preferred stock. 7. Define the following terms: authorized shares; issued shares; unissued shares; outstanding stock; treasury stock; par value stock; stated value stock; no par value stock; legal capital. 8. Prepare the journal entry required to record the issuance of capital stock for cash, for noncash assets or services, and the issuance of two or more classes of capital stock as a unit. 9. Identify factors which influence dividend policies of corporations. 10. Define and distinguish among the following types of dividends: cash dividends, property dividends, liquidating dividends, "small" stock dividends, "large" stock dividends. 11. Prepare the journal entries required to record the declaration and payment or distribution of cash dividends, property dividends, liquidating dividends, and stock dividends. 12. Define stock splits and distinguish between stock splits and stock dividends. 1
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13. Compare and contrast the effect of the various types of dividends and stock splits on total stockholders' equity; retained earnings; common/preferred stock (total par/stated value); additional paid-in capital; par/stated value per share; number of issued and outstanding shares. 14. Calculate the appropriate distribution of dividends among preferred shareholders and common shareholders. 15. Distinguish between restrictions on retained earnings by appropriation of retained earnings and by parenthetical or footnote disclosure, and prepare the journal entries related to formal retained earnings appropriations. 16. Define and distinguish between retired stock and treasury stock and explain why corporations reacquire stock. 17. Prepare the journal entries required to record the retirement of shares. 18. Prepare the journal entries required to record the acquisition and subsequent reissuance or retirement of treasury shares by the issuing corporation under the cost method. 19.
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This note was uploaded on 11/09/2010 for the course ACCT 301 taught by Professor Lynn during the Spring '10 term at University of Baltimore.

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ch18-5th_outline - 1 CHAPTER 18 Spiceland, Sepe, Nelson,...

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