# Stockholders losses are generally limited to the

• Test Prep
• 20
• 90% (50) 45 out of 50 people found this document helpful

This preview shows page 13 - 16 out of 20 pages.

*stockholder’s losses are generally limited to the amount of capital they have invested inthe corporation.Understand the journal entry to record the issuance of common stock and calculate total shares issued.total sharesissued=shares outstanding+treasurystockDefine treasury stock.A corporations own stock that has been reacquired(bought-back) by the corporation and is being held for its future use; these shares don’t pay dividends,have no voting rights, and should not be included in shares outstanding calculationsCalculate preferred stock dividends.Step 1: Divide the dividend by 100 to convert to a decimalStep 2: Multiply the dividend(decimal) by the par valueto find the preferred dividends per share
Step 3: Multiply the dividends per share by the number of preferred shares you own to calculate the dividend distribution you will receive for your preferred stocks. EX:Step 1: If the stock pays a 4% dividend… 4100=0.04Step 2: If the par value equals \$25…\$25x0.04=\$0.10Step 3: So if you own 400 shares, to find what you will own in stock dividends…\$0.10x400=40Identify the declaration date, record date, or payment date associated with dividends. TypeDeclaration DateRecord DatePayment DateDateDec. 1Dec. 22January 20.NotesThe date the dividend is announced by board of directors; at this point the company has legalresponsibility to pay it.Once a company announces a dividend, it sets a date of record onor before which you must be on the company's books in order to receive the declared dividend. On the date of record, the company will determine its shareholders, or "holders of record," and the company will use this date to establish to whom it will send financial reports, proxy statements and other information. the scheduled date the dividend is paid to shareholders.Identify the journal entry to record the declaration of a dividend.
Define retained earnings.