ACTG 211 Lecture Notes - Lecture 10: Preferred Stock, Financial Statement, Treasury Stock
30 May 2018
School
Department
Course
Professor
Accounting 211 – Lecture 10 – Reporting and Analyzing
Equity
Characteristics of Corporations
• Advantages
o Separate legal entity
o Limited liability of stockholders
o Transferable ownership rights
o Continuous life
o Lack of mutual agency for stockholders
o Ease of capital accumulation
• Disadvantages
o Government regulation
o Corporate taxation
Organizing and Managing a Corporation
• Stockholders
o Ultimate control
o Stockholders usually meet once a year
• Board of Directors
o Selected by a vote of the stockholders
o Overall responsibility for managing the company
• Chief Finance Officer
• Vice President Finance
• Vice President Production
• Vice President Marketing
Basics of Capital Stock
• Total amount of stock that a corporation’s charter authorizes it to sell
• Total amount of stock that has been issued or sold to stockholders
Classes of Stock
• Par value
• No-par value
• Stated value
Issuing Par Value Stock at a Premium
- On September 1, Matrix Inc. issued 100,000 shares of $2 par value stock for $25 per
share.
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Document Summary
Accounting 211 lecture 10 reporting and analyzing. Characteristics of corporations: advantages, separate legal entity, limited liability of stockholders, transferable ownership rights, continuous life, lack of mutual agency for stockholders, ease of capital accumulation, disadvantages, government regulation, corporate taxation. Basics of capital stock: total amount of stock that a corporation"s charter authorizes it to sell, total amount of stock that has been issued or sold to stockholders. Classes of stock: par value, no-par value, stated value. On september 1, matrix inc. issued 100,000 shares of par value stock for per share. Record: the cash received, the number of shares issued x the par value per share in the common stock account, the remainder is assigned to paid-in capital in excess of par value, common stock, cash. On september 1, matrix inc. issued 100,000 shares of par value stock for land valued at ,500,000: land. 2,500,000: common stock, par value, paid-in capital in excess of par value.
