Intermediate Accounting 14 Accounting and Reporting of Stockholders’ Equity.doc

Intermediate Accounting 14 Accounting and Reporting of Stockholders’ Equity
Accounting and Reporting of
Stockholders’ Equity
Chapter
14
Issuance of stock
Reacquisition of shares
The Corporate Form
Corporate Capital
Preferred Stock
Dividend Policy
Presentation and Analysis
State corporate law
Capital stock or share system
Variety of ownership interests
Features
Accounting for and reporting preferred stock
Financial condition and dividend distributions
Types of dividends
Stock split
Disclosure of restrictions
Presentation
Analysis
Stockholders’ Equity
Three primary forms of anization
The Corporate Form anization
Proprietorship
Partnership
Corporation
LO 1 Discuss the characteristics of the corporate form anization1>.
Special characteristics of the corporate form:
Influence of state corporate law.
Use of capital stock or share system.
Development of a variety of ownership interests.
State Corporate Law
The Corporate Form anization
LO 1 Discuss the characteristics of the corporate form anization.
Corporation must submit articles of incorporation to the state in which incorporation is desired.
General Motors - incorporated in Delaware.
. Steel - incorporated in New Jersey.
Accounting for stockholders’ equity follows the provisions of each states business incorporation act.
Capital Stock or Share System
The Corporate Form anization
LO 1 Discuss the characteristics of the corporate form anization.
In the absence of restrictive provisions, each share carries the following rights:
To share proportionately in profits and losses.
To share proportionately in management (the right to vote for directors).
To share proportionately in assets upon liquidation.
To share proportionately in any new issues of stock of the same class—called the preemptive right.
Variety of Ownership Interests
The Corporate Form anization
LO 1 Discuss the characteristics of the corporate form anization.
Common stock represents basic ownership intere