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. McGraw Hill Irwin Copyright 2014 by The McGraw Hill Companies Inc. All rights reserved. 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 McGraw Hill Irwin Copyright 2014 by The McGraw Hill Companies Inc. All rights reserved. 1-3 Nature of Stockholders Equity Less Total Stockholders Equity Treasury Stock Paid in Capital Retained Earnings Preferred Common Stock Stock Par or Par or Additional Additional Par or Par or Additional Additional Stated Stated Paid In Paid In Stated Stated Paid In Paid In Value Capital Capital Value Value Capital Capital McGraw Hill Irwin 8 3 2008 The McGraw Hill Companies Inc. All Rights Reserved. 1-4 LO 1 Stockholders Equity Section Stockholders Equity Paid-in capital Common stock 1 par 100 000 shares issued and 95 000 outstanding 100 000 Additional paid-in capital 2 800 000 Total paid-in capital 2 900 000 Retained earnings 1 400 000 Total paid-in capital and retained earnings 4 300 000 Less cost of treasury stock 5 000 shares 150 000 Total stockholders equity 4 150 000 McGraw Hill Irwin 8 4 2008 The McGraw Hill Companies Inc. All Rights Reserved. 1-5 LO 1 Common Stock Issued shares that Issued shares include have been Issued outstanding and Issued reacquired. treasury shares. Treasury Shares Shares Unissued Outstanding Authorized Authorized Issued shares that are owned by Shares Shares stockholders. McGraw Hill Irwin 8 5 2008 The McGraw Hill Companies Inc. All Rights Reserved. 1-6 LO 2 Preferred Stock Normally Normally nono voting voting Has Has aa par par or or stated stated rights rights but but dividend dividend value value with with dividend dividend payment payment has has expressed expressed as as aa preference preference over over percent percent ofof par. par. common common stock. stock. IfIf callable callable may may be .
