Ch 15 Stockholder's Equity

Front 1

Sources of stockholder's equity

Back 1

1.Paid in Capital
2.Retained Earnings
3.Accum OCI

Front 2

Paid in Capital

Back 2

Amounts invested by shareholders

Front 3

retained earnings

Back 3

amounts earned by shareholders

Front 4

Accum Other Comprehensive Income

Back 4

non-owner changes in equity

Front 5

common stockholder

Back 5

a. Voting Rights.
b. Share in profits when dividends are declared.
c. Share in the distribution of assets if the company is liquidated.

Front 6

preferred stockholder

Back 6

a. Dividend and Liquidation preference over common stockholders.
b. No voting rights.
c.reedemable

Front 7

Features of preferred stock

Back 7

1.can be converted into common stock
2. dividends

Front 8

Dividends

Back 8

a. Stated dollar amount OR percent of par
b.may be cumulative or non-cumulative
c.unpaid dividends on cumulative preferred stock must be paid before any distributions to common shareholders

Front 9

Redemable Preferred stock

Back 9

1.has debt and equity features
2.mandatory redemption period
3.classified as debt by FASB 150
4.previously a mesadain item

Front 10

Stock Issued for Cash

Back 10

Investment is allocated between par value and paid in capital

Front 11

common stock is always reported at ____ value. Diff is _____

Back 11

par, paid in capital

Front 12

Non-cash stock transactions

Back 12

The transaction should be recorded at the fair value of either the shares or the noncash consideration, whichever is more clearly evident.

Front 13

Share Issue Costs

Back 13

Legal, printing, and accounting fees necessary to sell shares

Front 14

Share Issue Costs reduce the

Back 14

cash proceeds and paid-in capital

Front 15

Purposes of reaquisition of shares

Back 15

a.Decrease supply of shares in the market to support price of remaining shares.
b.Increase earnings per share.
c.To provide stock for stock compensation agreements.

Front 16

DB CR for Issuance of Stock

Back 16

cash 1,000
Common stock (par)100
Paid-In Cap (diff)900

Front 17

Treasury Stock is a reduction in

Back 17

stockholder's equity

Front 18

Treasury stock uses the ___ method

Back 18

cost

Front 19

DB CR Aquisition of treasury stock

Back 19

Treasury stock xxx
Cash xxx

Front 20

DB CR Sale of Treasury stock BELOW Cost

Back 20

Cash XXX
PIC Treasury StockXXX
Treasury Stock (cost)XXX

Front 21

DB CR Sale of Treasury stock ABOVE Cost

Back 21

Cash XXX
Treasury Stock (cost) XXX
PIC Treasury Stock XXX

Front 22

Special rule for PIC Treasury stock when sold BELOW cost

Back 22

only debit this account to the extent of its credit balance; use retained earnings for difference

Front 23

DB CR if sell BELOW cost with extra credit

Back 23

Cash 10
Retained earnings (bal) 1
PIC from treasury stock 2
Treasury stock (cost) 10

Front 24

Retained Earnings represents

Back 24

accumulated, undistributed Income or Loss

Front 25

Dividends __________ retained earnings

Back 25

reduce

Front 26

cumulated deficit

Back 26

A debit balance in retained earnings is considered a deficit

Front 27

Registered owners at the date of ________, are entitled to dividends

Back 27

record

Front 28

DB CR Declaration date of cash dividends

Back 28

Retained Earnings XXX
Cash Dividends Pybl XXX

Front 29

No dividends are declared or paid on ____________

Back 29

treasury stock

Front 30

Property Dividend features

Back 30

1.the Fair market vale of assets to be distributed/recorded is used
2.adjust the asset to fair value, which results in a gain or loss

Front 31

DB CR to record gain on property dividends on declaration date

Back 31

Investment in pref stock X
Gain on appr. of Inv X

Front 32

DB CR to record property dividends on distribution date

Back 32

Prop dividends pybl X
Inv in pref stock X

Front 33

What happens with a stock dividend?

Back 33

1.additional shares of stock are distributed
2.each stockholder's % stays the SAME

Front 34

Accounting for stock dividends depends on

Back 34

if its small or large

Front 35

Small stock dividend is recorded at

Back 35

fair value

Front 36

large stock dividend is recorded at

Back 36

par value

Front 37

DB CR for small stock dividend

Back 37

Retained Earning (FAIR VALUE)
Common stock (par)
PIC excess of par

Front 38

DB CR for large stock dividend

Back 38

Retained earnings (par)
Common stock (par)

Front 39

why have a stock split?

Back 39

if investors are concerned the stock is overvalued

Front 40

stock split typically has no journal entry because

Back 40

Total stock remains the same, companies adjust par value

Front 41

What do we need to see on the balance sheet?

Back 41

1.classes of capital stock (including: par value, # of shares authorized and issues)
2.Paid-In capital Accounts
3.Retained earnings
4.Accumulated OCI

Front 42

What do we need to see on the stmt of stockholder's equity?

Back 42

Changes in each equity line item (columnar format) – including capital stock, paid-in capital, retained earnings, accumulated other comprehensive income)
1.Beginning Balance
2.Additions
3.Deductions
4.Ending Balance

Front 43

The balance sheet shows the ___________ activity of the year

Back 43

point in time, at end of year

Front 44

What are required disclosures?

Back 44

1.Dividend and Liquidation Preferences on P/S
2.Call and Conversion Information on P/S
3.Preferred Dividends in Arrears
4.Restrictions on Retained Earnings