ch12 Corporations Organization, Capital Stock Transactions, and Dividends 财务会计英文版课件.ppt

Organizational Structure of a Corporation Stockholders’ Equity = Assets – Liabilities Represents the stockholders’ share of the total assets. 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 Accounting for Cash Dividends Issuing Stock at No-Par Some states require that the entire proceeds from the sale of no-par stock be treated as legal capital. Issuing Stock at No-Par Also, no-par stock may be assigned a stated value per share. The stated value is recorded similar to a par value. Issuing Stock with a Stated Value On March 30, issued 1,000 shares of no-par common stock at $40; stated value, $25. Mar. 30 Cash 40 000 00 Issued 1,000 shares of no-par common stock at $36; stated value, $25. Common Stock 25 000 00 Paid-in Capital in Excess of Stated Value 15 000 00 Occasionally, a corporation buys back its own stock for the purpose of later reissuing it. This stock is referred to as treasury stock. Treasury stock is stock that: 1. has been issued as fully paid. 2. has been reacquired by the corporation. 3. has not been canceled or reissued. Treasury Stock Transactions A commonly used method of accounting for treasury stock is the cost method. Treasury Stock Transactions Cost Method On January 5, a firm purchased 1,000 shares of treasury stock (common stock, $25 par) at $45 per share. Jan. 5 Treasury Stock 45 000 00 Purchased 1,000 shares of treasury stock at $45. Cash 45 000 00 On June 2, sold 200 shares of treasury stock at $60 per share. June 2 Cash 12 000 00 Sold 200 shares of treasury stock at $60. Treasury Stock 9 000 00 Paid-in Capital from sale of Trea