Acct 4120 Chapter 18 Spiceland 5th edition

Acct 4120 Chapter 18 Spiceland 5th edition - Acct 4120...

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Acct 4120 Chapter 18 Shareholders’ Equity
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Sources of Shareholders’ Equity Shareholders’ Equity Contributed Capital Retained Earnings Amounts earned by corporation Amounts invested by shareholders Accumulated Other Comprehensive Income Other gains and losses not included in net income Chapter 18 page 2
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Accounting Equation Assets Liabilities + Stockholders’ Equity Company’s economic resources (or benefits) Non-owner claims against resources Owners claims against resources Retained Earnings Contributed Capital Accumulated Other Comprehensive Income Common Stock APIC Chapter 18 page 3
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Formation of a Corporation Number and classes of shares authorized. Composition of initial board of directors. Nature and location of business activities . Corporate Charter Chapter 18 page 4
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Rights of Common Shareholders Right to vote Right to share in distribution of assets if company is liquidated. Right to share in profits when dividends are declared. Preemptive right to maintain percentage ownership. Chapter 18 page 5
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Authorized, Issued, and Outstanding Capital Stock Authorized Shares The maximum number of shares of capital stock that can be sold to the public is called the authorized number of shares. Chapter 18 page 6
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Issued shares are authorized shares of stock that have been sold. Unissued shares are authorized shares of stock that have never been sold. Authorized Shares Authorized, Issued, and Outstanding Capital Stock Chapter 18 page 7
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Unissued Shares Treasury Shares Outstanding Shares Treasury shares are issued shares that have been reacquired by the corporation. Issued Shares Outstanding shares are issued shares that are owned by shareholders. Authorized Shares Authorized, Issued, and Outstanding Capital Stock Chapter 18 page 8
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Capital Stock Par value stock Designated dollar amount per share stated in the corporate charter. Par value has no relationship to market value. No-par stock Dollar amount per share not designated in corporate charter. Corporations can assign a stated value per share (treated as if par value). Chapter 18 page 9
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Two Types of Capital Stock Common Preferred Chapter 18 page 10
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Common Stock Chapter 18 page 11
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Preferred Stock This type of stock has preferred (or better) rights compared to common stock Usually better rights relate to dividends Cumulative Participation Right to convert into common stock Chapter 18 page 12
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This note was uploaded on 09/20/2011 for the course ACCT 4120 taught by Professor Franz during the Spring '11 term at Toledo.

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Acct 4120 Chapter 18 Spiceland 5th edition - Acct 4120...

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