《Survey of accounting 2th会计学 Carl S.Warren》ch08.pptVIP

Short-Term Notes Payable Recording Payroll Employers are required to withhold federal income tax from each employee based on the withholding table and information provided by the employee’s W-4 form. Federal income tax and FICA tax must be withheld from the pay of each employee. Deductions for other purposes may be withheld by mutual agreement. The face amount of the bonds, which is the amount due at the maturity date. The periodic interest to be paid on the bonds. The market rate of interest. Sources of Paid-In Capital Major Rights that Accompany Ownership of a Share of Stock Classes of Stockholders Classes of Stockholders Common Stock – the basic ownership of stock with rights to vote in election of directors, share in distribution of earnings, and purchase additional shares. Preferred Stock – A class of stock with preferential rights over common stock in payment of dividends and company liquidation. Treasury Stock Transactions Stock Splits Stock Splits Earnings per share $ 1.20 $ 1.50 $ 2.46 Bonds Issued at Face Amount At the maturity date, the payment of the principal of $100,000 is recorded. Describe and illustrate the financing of operations through issuance of stock. 4 Learning Objective Authorized Issued Outstanding Number of Shares 1. The right to vote in matters concerning the corporation. 2. The right to share in distribution of earnings. 3. The right to share in assets on liquidation. The two primary classes of paid-in capital are common stock and preferred stock. The primary attractiveness of preferred stocks is that they are preferred over common as to dividends. Preferred stockholder Assume 1,000 shares of $4 cumulative preferred stock and 4,000 shares of common stock. No dividends have been paid in the preceding two years. Cumulative Preferred Stock So, preferred dividends are two years in arrears. On March 7, 2005, the board of directors declares dividends of $22,000. Cumulative Preferred Stock $4,000 $4,000 $4,000 Cumulative Preferred Stock Pr