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Unformatted text preview: Owners Equity Paper 1 Owners Equity Paper Samantha Bradley ACC 423 – Intermediate Financial Accounting—III August 23, 2010 Howard Pickering Owners Equity Paper 2 Intro Owners equity is the capital utilized in a business, calculated by subtracting the book value of the liabilities from the book value of the assets . “Owner's equity is increased by in- creases in owner capital contributions, or increases in profits of the business” (Murray, J 2010). The purpose of this paper is to explain the importance of keeping paid-in capital separate from earned capital, is paid-in capital or earned capital more important to an investor, and are basic or diluted earnings per share more important to an investor. Paid-in vs. Earned Capital Paid-in Capital is the total amount paid in on capital stock and earned capital is the amount of profit that has been produced by the business itself. These two must be separate for in- vestor and shareholder information so that the difference between the two can be visibly de-...
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This note was uploaded on 04/17/2011 for the course ACCOUNTING 490 taught by Professor Santos during the Spring '11 term at University of Phoenix.
- Spring '11
- Financial Accounting