对外经贸会计专业英语chap.pptxVIP

;Existence is separate from owners.;Limited personal liability for stockholders.;Heavy taxation.;Publicly Owned Corporations Face Different Rules;The costs associated with incorporation are usually expensed immediately, but amortized over 5 years for tax purposes.;Stockholders;Ultimate control;Ultimate control;Each unit of ownership is called a share of stock. A stock certificate serves as proof that a stockholder has purchased shares.;When the stock is sold, the stockholder signs a transfer endorsement on the back of the stock certificate.;;;Stockholders’ Equity of a Corporation;;;;Par value is an arbitrary amount assigned to each share of stock when it is authorized.;Common stock can be issued in three forms:;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, 2005. ;The journal entry to record an issuance of 10,000 shares of $2 par value stock for $25 per share on September 1, 2005, should include a credit to common stock for the par value of the shares issued. ;Issuance of Par Value Stock;A separate class of stock, typically having priority over common shares in . . . Dividend distributions (rate is usually stated). Distribution of assets in case of liquidation.;Vs.;Example: Consider the following partial Statement of Stockholders’ Equity.;Example: Consider the following partial Statement of Stockholders’ Equity.;I just converted 100 shares of preferred stock into 1,000 shares of common stock and ended up with a higher dividend yield!;Preferred Stock;I love this stuff! Can we do some more?;; Factors affecting marketprice of preferred stock: Dividend rate Risk Level of interest rates; Factors affecting market price of common stock: Investors’ expectations of future profitability. Risk that this level of profitability will not be achieved.;Book Value per Shareof Common Stock;Ice Cream Parlor;Assume that a corporation had 5,000 shares of $1 par value common stock outstandin