INTERMEDIATE ACCOUNTING（赖红宁）4-3--CH15.pptVIP

Objectives 1. Explain the corporate form of organization. 2. Know the rights and terms that apply to capital stock. 3. Account for the issuance of capital stock. 4. Describe a compensatory stock option plan. Recognize compensation expense for a compensatory stock option plan. Account for a fixed compensatory stock option plan. Types of Corporations 1) Private Corporations (stock and nonstock; open and closed) 2) Public corporations 3) Domestic corporations 4) Foreign corporations Stockholders’ Rights The right to share in the profits when a dividend is declared. The right to elect directors and to establish corporate policies. The right (called a preemptive right) to maintain a proportionate interest. The right to share in the distribution of the assets of the corporation if it is liquidated. Basic Terminology Basic Terminology Issuance of Capital Stock Stock Subscriptions 1) Return to the subscriber the entire amount paid in. 2) Return to the subscriber the entire amount paid in, less any costs incurred to reissue the stock. 3) Issue to the subscriber a lesser number of shares based upon the total amount of payment received. 4) Require the forfeiture of all amounts paid in. Combined Sales of Stock Noncompensatory Stock Option Plans Recognition of Compensation Expense Performance-Based Stock Option Plan Additional Disclosures About a Compensatory Stock Option Plan 1. A description of the plan, including the general terms. 2. The number and weighted-average exercise prices for options granted, exercised, outstanding, forfeited, and expired during the year. 3. The weighted-average grant-date fair values of options granted during the year. 4. A description of the method and assumptions used during the year to estimate the fair values of options. Preferred Stock Characteristics Preference as to dividends. Accumulation of dividends. Participation in excess dividends. Convertibility into common stock. Attachment of stock warrants (rights). Callability by the corpora