股东权益缴入股本解读.ppt

4 End of chapter 11. The executive management team manages the day-to-day decisions for the corporation. Learning objective number 4 is to account for paid-in capital and prepare the equity section of a corporate balance sheet. Stockholders’ equity can be increased in two ways. First, equity is increased by issuing stock to investors. This is an increase in Paid-in Capital. Second, equity is increased by the retention of profits earned by the corporation. This is an increase in Retained Earnings. There are several terms related to stock that must be understood. Authorized shares is the maximum number of shares of stock that can be sold to the public. The number of authorized shares is identified in the corporation’s corporate charter, issued by the state. Authorized shares can be classified as issued and unissued. Unissued shares are shares of stock that have never been sold to the public. Issued shares are shares of stock that have been sold to the public at some point. Part I Issued shares can be classified as outstanding shares and treasury shares. Outstanding shares are shares that are currently owned by stockholders. Part II Treasury shares are shares that once were owned by stockholders but were repurchased by the corporation in the stock market. Thus, the corporation is now the owner of those shares. Par value is an arbitrary amount assigned to each share of stock in the company’s charter. Par value is typically a nominal amount. It is not related in any manner to market value, which is the selling price of a share of stock. Part I Stock can have a par value, not have a par value, or have a stated value. Part II Let’s look at how to account for par value stock. Accounting entries for stated value stock are very similar to accounting for par value stock. When a company has no-par stock, all the proceeds are credited to the Common Stock account. When par value stock is sold for cash, the Common Stock account is credited for the par value of th