Session 12- Class Notes - Equity (1)

Session 12- Class Notes - Equity (1) -...

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Class 12: Shareholders’  Equity Equity Hye Sun Chang ACCY 303  
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Learning Objectives Learning Objectives 1. Describe the components of shareholders’  equity and explain how they are reported. 1. Discuss the accounting for share issuance,  share repurchase, and retired shares.
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Balance Sheet  Balance Sheet  Current Assets Cash and cash equivalents Short-term investments: Trading or AFS  securities  Accounts receivable Inventory Non-current Assets  Current Liabilities Accounts payable Notes payable Interest payable   Non-current liabilities Bonds payable Lease payable Deferred tax liability Stockholders Equity   Long-term investments  Property, plant and equipment Intangible assets: goodwill, patents Other assets : bond issue cost, deferred tax  asset  Capital stock: preferred stock, common stock Additional paid-in capital Retained earnings Accumulated other comprehensive income Treasury stock 
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Sources of Shareholders’ Equity  Sources of Shareholders’ Equity  Shareholders’ Equity Paid-in Capital Retained Earnings Amounts earned by corporation Amounts invested by shareholders Accumulated Other Comprehensive Income Other gains and losses not included in net income
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Fundamental Share Rights Fundamental Share Rights 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.
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Authorized, Issued, and  Authorized, Issued, and  Outstanding Capital Stock 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.
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Issued shares are authorized shares of stock that have been sold. Unissued
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This note was uploaded on 11/08/2011 for the course ACCY 303 taught by Professor Staff during the Spring '08 term at University of Illinois, Urbana Champaign.

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Session 12- Class Notes - Equity (1) -...

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