mba会计教材chap11~1

Click to edit Master title style,Click to edit Master text styles,Second Level,?The McGraw-Hill Companies, Inc., 1999,Slide,11-,43,Irwin/McGraw-Hill,Chapter 11,Stockholders?Equity: Paid-in Capital,Corporations,Existence is separate from owners.,An entity created by law.,Has rights and privileges.,Privately, or Closely, Held,Publicly Held,Ownership can be,Why Businesses Incorporate,Stockholders have no personal liability.,Privately, or Closely Held,Publicly Held,Transferability of ownership.,Professional management.,Continuity of existence.,Disclose financial information.,Financial statements prepared in accordance with GAAP.,CPAs must audit the financial statements.,Must comply with federal securities laws.,Must submit financial information for SEC review.,Publicly Owned Corporations face Different Rules,Rights of Stockholders,Stockholders,Rights,Voting (in person or by,proxy,).,Proportionate distribution of,dividends,.,Proportionate distribution of assets in a liquidation.,Rights of Stockholders,Ultimate control,Stockholders usually meet once a year.,Rights of Stockholders,Stockholder ledgers are often maintained by a stock transfer agent or stock registrar.,Each unit of ownership is called a,share of stock,.,A,stock certificate,serves as proof that a stockholder has purchased shares.,Rights of Stockholders,When the,stock,is sold, the stockholder signs a transfer endorsement on the back of the,stock certificate,.,Rights of Stockholders,Functions of the Board of Directors,Overall responsibility for managing the company.,Selected by a vote of the stockholders,Functions of the Corporate Officers,Chief Accountant,Contractual and legal representation,Custodian of funds,Authorization and Issuance of Capital Stock,The maximum number of shares of capital stock that can be sold to the public.,Authorized,Shares,Authorized,Shares,Issued shares,are authorized shares of stock that have been sold.,Unissued shares,are authorized shares of stock that never have been sold.,Usually shares are sold through an underwriter.,Authorization and Issuance of Capital Stock,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 stockholders.,Authorized,Shares,Authorization and Issuance of Capital Stock,Paid-In Capital of a Corporation,Par value,is an arbitrary amount assigned to each share of stock when it is authorized.,Market price,is the amount that each share of stock will sell for in the market.,Stockholders?Equity,Common stock can be issued in three forms:,No-Par Common Stock,Par Value Common Stock,Stated Value Common Stock,Let抯 examine this form of stock.,Stockholders?Equity,Issuance of Par Value Stock,Prepare the journal entry to record an issuance of 10,000 shares of $2 par value stock for $25 per share which occurred on September 1, 1999.,Record:,The cash received.,The number of shares issued ?the par value per share in the,Common Stock,account.,The remainder is assigned to,Contributed Capital in Excess of Par,.,Issuance of Par Value Stock,The journal entry to record an issuance of 10,000 shares of $2 par value stock for $25 per share on September 1, 1999 should include a credit to common stock for the par value of the shares issued.,Issuance of Par Value Stock,Common stock can be issued in three forms:,No-Par Common Stock,Par Value Common Stock,Stated Value Common Stock,Stockholders?Equity,All proceeds credited to Common Stock,Treated like par value common stock,Preferred Stock,A separate class of stock, typically having priority over common shares in . . .,Dividend distributions.,Distribution of assets in case of liquidation.,Usually has a stated dividend rate.,Normally has no voting rights.,Usually callable by the company.,Cumulative Preferred Stock,Vs.,Noncumulative,Cumulative,Dividends in arrears,must be paid before dividends may be paid on common stock.,Undeclared dividends from current and prior years do not have to be paid in future years.,Stock Preferred as to Dividends,Example: Consider the following partial Statement of Stockholders?Equity.,During 1999, the directors declare cash dividends of $5,000. In year 2000, the directors declare cash dividends of $42,000.,Stock Preferred as to Dividends,Convertible Preferred Stock,I just converted 100 shares of preferred stock into 1,000 shares of common stock and ended up with a higher dividend yield!,Gee, I cannt do that with my preferred stock.,Some preferred stock is convertible into shares of common stock.,Preferred Stock,Stock Issued for Assets Other Than Cash,Companies sometimes issue stock in exchange for non-cash assets.,Record the transaction at the market value of the goods or services received.,I love this stuff!,Can we do some more?,Market Value,Accounting by the issuer.,Accounting by the invester.,Common stock is carried at original issue price.,Investments in marketable securities are carried at market value.,Market Price of Preferred Stock,Factors affecting market price of preferred stock:,Dividend rate,Risk,Level of interest rates,The return based on the market value is called the 揹ividend yield?,Market Price of Common Stock,Factors affecting market price of common stock:,Investors?expectations of future profitability.,Risk that this level of profitability will not be achieved.,Changes in market value have no impact on the books of the issuer.,Stock Splits,Companies use stock splits to reduce market price.,Outstanding shares increase, but par value is decreased proportionately.,Ice Cream Parlor,Banana Splits On Sale Now,Stock Splits,Example,Assume that a corporation had 5,000 shares of $1 par value common stock outstanding before a 2杅or? stock split.,Assume that a corporation had 5,000 shares of $1 par value common stock outstanding before a 2杅or? stock split.,Increase,Decrease,No Change,Stock Splits,Example,Unissued,Shares,Treasury,Shares,Outstanding,Shares,Treasury shares,are issued shares that have been reacquired by the corporation.,Issued,Shares,Authorized,Shares,Treasury Stock,Treasury Stock,No voting or dividend rights,Contra equity account,When stock is reacquired, the corporation records the treasury stock at,cost,.,On May 1, 1998 East Corp. reacquired 3,000 shares of its common stock at $55 per share.,Prepare the journal entry for May 1.,Treasury Stock,Example,On May 1, 1998 East Corp. reacquired 3,000 shares of its common stock at $55 per share.,Prepare the journal entry for May 1.,Treasury Stock,Example,Treasury Stock,Example,On December 3, 1999 East Corp. reissued 1,000 shares of the stock at $75 per share.,Prepare the journal entry for December 3.,On December 3, 1999 East Corp. reissued 1,000 shares of the stock at $75 per share.,Prepare the journal entry for December 3.,1,000 shares ?$75 = $75,000,1,000 shares ?,$55 cost,= $55,000,Treasury Stock,Example,Stockholders?Equity Presentation,End of Chapter 11,This isnt what I meant when I asked for stock for my birthday!,