Accounting Notes- 10-28

Accounting Notes- 10-28 - Issuance of stock-corporation can...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
ACCOUNTING 2000 10/28/11 - An entity separate and distinct from its owners - Classified by purpose: Not for profit For profit - Classified by ownership: Publicly held Privately held Characteristics of a corporation - separate legal existence -limited liability of stockholders -transferable ownership rights -ability to acquire capital -continuous life - corporate management - government regulations -additional taxes *yellow= advantage *green=disadvantage *blue=can be an advantage or disadvantage Forming a corporation (initial steps) 1. File application with secretary of state 2. State grants charter 3. Corporation develops by-laws CLICKER: which of the following is not a major advantage of a corporation? Government regulations Stockholder’s Rights -vote in election board of directors -share corporate ownership -keep same percentage ownership -share in assets upon liquidation (residual claim) Authorized stock -charter indicates amount of stock that a corporation is authorized to sell -number of authorized shares is often reported in stockholder’s equity section
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Issuance of stock-corporation can issue common stock (directly and indirectly)-US Securities exchange Par value=arbitrary amount, usually low amount; protection of corporate creditors Paid in capital=total amount of cash and other assets paid in to the corporation by stockholders in exchange for capital stock Journal entries Issuing stock at par value: Cash Common Stock Issuing stock at above par value: Cash Common Stock Paid in Capital in excess par-common stock Ex: issue 1000 share $1 per value @ par Cash 1000 Common Stock 1000 Ex: issue 1000 shares $1 per value common stock @ $5 Cash 5000 Common stock 1000 Paid in capital in excess par-common stock 4000 Ex: issue $1000 shares $1 par value common stock @ $8 Cash 8000 Common stock 1000 Paid in capital in excess par- common stock 7000 CLICKER: 1000 shares of $1 par of common stock are issued at $8, what is the journal entry? Credit common stock for $1000...
View Full Document

Page1 / 2

Accounting Notes- 10-28 - Issuance of stock-corporation can...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online