discussion 6 - How is the stockholders' equity section of a...

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How is the stockholders' equity section of a corporate balance sheet different from that in a single-owner business? Single-owner companies would likely have fewer line items. Those include common stock, additional paid in capital, preferred stock and retained earnings. Large corporations would have those basic accounts, but with a twist. Common stock could have multiple classes, with some voting, some nonvoting. There could also be preferred stock, which they may or may not have multiple classes. The stockholders' equity section of a corporation's balance sheet is: STOCKHOLDERS' EQUITY Paid-in Capital ..Preferred Stock ..Common Stock ..Paid-in Capital in Excess of Par Value - Preferred Stock ..Paid-in Capital in Excess of Par Value - Common Stock ..Paid-in Capital from Treasury Stock Retained Earnings Less: Treasury Stock When we already have the income statement and balance sheet to tell us about the financial performance and financial health of a company, why was there a need to require companies to prepare a statement of cash flows? The balance sheet, income statement, and retained earnings statement provide only limited information about a company’s cash receipts and cash payments. None of these statements presents a detailed summary of where cash came from and how it was used.
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This note was uploaded on 04/11/2011 for the course FIN 504 taught by Professor Joe during the Fall '10 term at Keller Graduate School of Management.

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discussion 6 - How is the stockholders' equity section of a...

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