Ch13 - 13 Corporations Organization and Capital Stock...

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568 Chapter 13 Corporations: Organization and Capital Stock Transactions Scan Study Objectives a Read Feature Story a Read Preview a Read text and answer p. 577 a p. 579 a p. 581 a p. 585 a p. 589 a Work Comprehensive p. 589 a Review Summary of Study Objectives a Answer Self-Study Questions a Complete Assignments a DO IT! After studying this chapter, you should be able to: 1 Identify the major characteristics of a corporation. 2 Differentiate between paid-in capital and retained earnings. 3 Record the issuance of common stock. 4 Explain the accounting for treasury stock. 5 Differentiate preferred stock from common stock. 6 Prepare a stockholders’ equity section. The Navigator STUDY OBJECTIVES A Feature Story “HAVE YOU DRIVEN A FORD LATELY?” A company that has produced such renowned successes as the Model T and the Mustang, and such a dismal failure as the Edsel, would have some inter- esting tales to tell. Henry Ford was a defiant visionary from the day he formed Ford Motor Company ( www.ford.com ) in 1903. His goal from day one was to design a car he could mass-produce and sell at a price that was affordable to the masses. In short order he accomplished this goal. By 1920, The Navigator A DO IT! PDF Watermark Remover DEMO : Purchase from www.PDFWatermarkRemover.com to remove the watermark
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569 60% of all vehicles on U.S. roads were Fords. Henry Ford was intol- erant of anything that stood between him and success. In the early years Ford had issued shares to the public in order to finance the company’s exponential growth. In 1916 he decided not to pay a dividend in order to increase the funds available to expand the company. The shareholders sued. Henry Ford’s reaction was swift and direct: If the shareholders didn’t see things his way, he would get rid of them. In 1919 the Ford family purchased 100 percent of the outstanding shares of Ford, eliminating any outside “interference.” It was over 35 years before the com- pany again issued shares to the public. Ford Motor Company has continued to evolve and grow over the years into one of the largest international corporations. Today there are nearly a billion shares of publicly traded Ford stock outstanding. But some aspects of the company have changed very little: The chairman and chief executive of the company is a member of the Ford family. Also, the Ford family still retains a significant stake in Ford Motor Company. In a move Henry Ford might have supported, top management recently decided to centralize decision making—that is, to have more key decisions made by top management, rather than by division managers. And, reminiscent of Henry Ford’s most famous car, the company is attempting to make a “global car”—a mass- produced car that can be sold around the world with only minor changes.
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This note was uploaded on 01/30/2011 for the course ACT 240 taught by Professor Janson during the Summer '08 term at N. Michigan.

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Ch13 - 13 Corporations Organization and Capital Stock...

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