Chapter 8 - Accounting for and presentation of stockholders’ equity. After studying this chapter you should understand and be able to: Describe the characteristics of common stock and show how common stock is presented in the balance sheet; explain what preferred stock is, discuss what its advantages and disadvantages to the corporation are, and show how it is presented in the balance sheet; describe the accounting for a cash dividend and explain the dates involved in dividend transactions;. | © 2008 The McGraw-Hill Companies, Inc., All Rights Reserved. Accounting: What The Numbers Mean Tenth Edition Marshall, McManus, and Viele Chapter 8 Accounting for and Presentation of Stockholders’ Equity PowerPoint Authors: Susan Coomer Galbreath, ., CPA Charles W. Caldwell, ., CMA Jon A. Booker, ., CPA, CIA Cynthia J. Rooney, ., CPA Chapter 8: Accounting for and Presentation of Stockholders’ Equity Nature of Stockholders’ Equity Retained Earnings Par or Stated Value Additional Paid-In Capital Par or Stated Value Additional Paid-In Capital Treasury Stock Less Total Stockholders’ Equity Paid-in Capital Preferred Stock Common Stock 8- Stockholders’ equity is comprised of paid-in capital and retained earnings less treasury stock. Paid-in capital includes preferred and common stock, at par or stated value, and additional paid-in capital. Stockholders’ Equity Section LO 1 8- Learning Objective 1: Describe the characteristics of common stock and show how common stock is presented in the balance sheet. The stockholders' equity section of this balance sheet reports the dollar value of paid-in capital for common stock at $1 par value, $100,000 for 100,000 shares issued and 95,000 shares outstanding. Additional paid-in capital is listed at $2,800,000 resulting in $2,900,000 in total paid-in capital. Retained earnings of $1,400,000 is also reported. The cost of 5,000 shares of treasury stock, $150,000, is deducted from the total paid-in capital and retained earnings for total stockholders' equity of $4,150,000. Common Stock Authorized Shares Issued shares that are owned by stockholders. Issued shares that have been reacquired. Issued shares include outstanding and treasury shares. LO 1 Issued Shares 8- Authorized shares of common stock (the total number of shares of stock a company has been authorized to issue) include issued, outstanding, unissued, and treasury shares. Issued shares are shares that have been acquired by stockholders; outstanding | © 2008 The McGraw-Hill Companies, Inc., All Rights Reserved. Accounting: What The Numbers Mean Tenth Edition Marshall, McManus, and Viele Chapter 8 Accounting for and Presentation of Stockholders’ Equity PowerPoint Authors: Susan Coomer Galbreath, ., CPA Charles W. Caldwell, ., CMA Jon A. Booker, ., CPA, CIA Cynthia J. Rooney, ., CPA Chapter 8: Accounting for and Presentation of Stockholders’ Equity Nature of Stockholders’ Equity Retained Earnings Par or Stated Value Additional Paid-In Capital Par or Stated Value Additional Paid-In Capital Treasury Stock Less Total Stockholders’ Equity Paid-in Capital Preferred Stock Common Stock 8- Stockholders’ equity is comprised of paid-in capital and retained earnings less treasury stock. Paid-in capital includes preferred and common stock, at par or stated value, and additional paid-in capital. Stockholders’ Equity Section LO 1 8- Learning Objective 1: Describe the characteristics of common stock and show how common .
