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Notes for class 23 chapter 11 - Accounting 2610 Chapter 11...

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Accounting 2610 – Chapter 11 - Class 23 1 1 Class 23 Chapter 11 shareholders equity Accounting 2610 Tzachi Zach 4/8/2008 2 Announcements Case 3 due in two weeks Will be posted later today Midterm 2 We will talk about it on next time 3 Plan Types of stocks in corporations Common Preferred Accounting for Stock issuances Stock absorptions Treasury stocks Accounting for dividends Cash dividends Stock dividends Stock splits Accounting for stock options
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Accounting 2610 – Chapter 11 - Class 23 2 4 Business Background Advantage of a corporation Becoming an owner is easy Ownership transfer is easy Limited liability A corporation is a separate legal entity. As such: It can own assets Incur liabilities Enter into contracts Sue and be sued 5 Ownership of a Corporation Stockholders Rights •Voting (in person or by proxy). •Proportionate distributions of profits. •Proportionate distributions of assets in a liquidation. 6 Ownership of a Corporation Vice President (Production) Vice President (Marketing) Vice President (Finance) Vice President (Controller) President Board of Directors Internal (managers) and External (non-managers) Stockholders (Owners of voting shares) Elected by shareholders Appointed by directors
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