lecture11_student - Reporting and Interpreting Owners...

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Reporting and Interpreting Owners’ Equity Chapter 11
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Ownership of a Corporation Voting (in person or by proxy ). Proportionate distributions of profits. Proportionate distributions of assets in a liquidation. Rights Stockholders’
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Secondary Markets Transactions between two investors that do not affect the corporation’s accounting records. I’d like to sell some of my Sonic stock. I’d like to buy some of your Sonic stock.
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Issued shares are authorized shares of stock that have been sold. Unissued shares are authorized shares of stock that never have been sold. Authorized shares are the maximum number of shares of capital stock that can be sold to the public. Authorized, Issued, and Outstanding Shares
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Unissued Shares Treasury Shares Outstanding Shares Issued Shares Treasury shares are issued shares that have been reacquired by the corporation. Outstanding shares are issued shares that are owned by stockholders. Authorized, Issued, and Outstanding Shares
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Sale and Issuance of Capital Stock Initial public offering (IPO) Seasoned new issue The first time a corporation sells stock to the public. Subsequent sales of new stock to the public. Sonic issues new stock. Sonic
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Par Value and No-par Value Stock Legal capital is the amount of capital, required by the state, that must remain invested in the business. Par Value Nominal value Legal capital
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Par Value Market Value Par Value and No-par Value Stock Some states do not require that a par value be stated in the charter. Some states do not require a par value to be stated in the charter.
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Accounting for Capital Stock Two primary sources of stockholders’ equity Retained earnings Contributed capital Common stock, par value Capital in excess of par value
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Prepare the journal entry to record this transaction. On July 6, Sonic issued 100,000 shares of $0.01 par value common stock for $20 per share. Date Description Debit Credit
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This note was uploaded on 05/10/2011 for the course ACCT 1002 taught by Professor Ng during the Spring '11 term at National University of Singapore.

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lecture11_student - Reporting and Interpreting Owners...

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