Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record...
Transcript of Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record...
![Page 1: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/1.jpg)
Financial Accounting
John J. WildSixth Edition
McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
![Page 2: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/2.jpg)
Chapter 11
Reporting and Analyzing Equity
11-*
![Page 3: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/3.jpg)
Conceptual Learning Objectives
C1: Identify characteristics of corporations and their organization.
C2: Explain characteristics of, and distribute dividends between, common and preferred stock.
C3: Explain the items reported in retained earnings.
11-*
![Page 4: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/4.jpg)
A1: Compute earnings per share and describe its use.
A2: Compute price-earnings ratio and describe its use in analysis.
A3: Compute dividend yield and explain its use in analysis.
A4: Compute book value and explain its use in analysis.
Analytical Learning Objectives
11-*
![Page 5: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/5.jpg)
P1: Record the issuance of corporate stock.P2: Record transactions involving cash
dividends, stock dividends, and stock splits.P3: Record purchases and sales of treasury
stock and the retirement of stock.
Procedural Learning Objectives
11-*
![Page 6: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/6.jpg)
Advantages
■ Separate legal entity
■ Limited liability of stockholders
■ Transferable ownership rights
■ Continuous life
■ Lack of mutual agency for stockholders
■ Ease of capital accumulationDisadvantages
■ Governmental regulation
■ Corporate taxation
Characteristics of CorporationsC 1
11-*
![Page 7: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/7.jpg)
Ultimate control
Stockholders usually meet once a year
Organizing and Managing a Corporation
Selected by a vote of the
stockholders
Overall responsibility for managing the company
C 1
11-*
![Page 8: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/8.jpg)
Basics of Capital Stock
Total amount of stock that a corporation’s charter authorizes it to sell
C 2
Total amount of stock that has been issued or sold to stockholders
11-*
![Page 9: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/9.jpg)
Par value
No-par value
Stated value
Classes of StockC2
11-*
![Page 10: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/10.jpg)
Par Value StockOn September 1, Matrix, Inc. issued 100,000 shares of $2 par value stock for $25 per share. Let’s record this transaction.
Record:1. The cash received.2. The number of shares issued × the par value
per share in the Common Stock account.3. The remainder is assigned to Paid-In Capital
in Excess of Par Value, Common Stock.
Issuing Par Value StockP1
11-*
![Page 11: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/11.jpg)
Issuing Par Value Stock
Par Value StockOn September 1, Matrix, Inc. issued 100,000 shares of $2 par value stock for $25 per share. Let’s record this transaction.
P1
11-*
![Page 12: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/12.jpg)
Issuing Par Value StockP1
11-*
![Page 13: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/13.jpg)
Record:1. The asset received at its market value.2. The number of shares issued × the par value
per share in the Common Stock account.3. The remainder is assigned to Paid-In Capital
in Excess of Par, Common Stock.
Issuing Stock for Noncash Assets
Par Value StockOn September 1, Matrix, Inc. issued 100,000 shares of $2 par value stock for land valued at $2,500,000. Let’s record this transaction.
P1
11-*
![Page 14: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/14.jpg)
Issuing Stock for Noncash Assets
Par Value StockOn September 1, Matrix, Inc. issued 100,000 shares of $2 par value stock for land valued at $2,500,000. Let’s record this transaction.
P1
11-*
![Page 15: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/15.jpg)
To pay a cash dividend the corporation must have:
1. A sufficient balance in retained earnings and
2. The cash necessary to pay the dividend.
Cash DividendsP2
11-*
![Page 16: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/16.jpg)
Three important dates
Date of DeclarationRecord liability
for dividend.
Dividends
Date of RecordNo entryrequired.
Date of PaymentRecord payment of
cash to stockholders.
Cash DividendsP2
11-*
![Page 17: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/17.jpg)
Date of DeclarationRecord liability
for dividend.
Dividends
On January 19, a $1 per share cash dividend is declared on Dana, Inc.’s 10,000 common shares outstanding. The dividend will be paid on March 19 to stockholders of record on February 19.
Entries for Cash DividendsP2
11-*
![Page 18: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/18.jpg)
Date of RecordNo entryrequired.
Entries for Cash Dividends
On January 19, a $1 per share cash dividend is declared on Dana, Inc.’s 10,000 common shares outstanding. The dividend will be paid on March 19 to stockholders of record on February 19.
No entry required on February 19.
P2
11-*
![Page 19: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/19.jpg)
Date of Payment
Record payment ofcash to stockholders.
Entries for Cash Dividends
On January 19, a $1 per share cash dividend is declared on Dana, Inc.’s 10,000 common shares outstanding. The dividend will be paid on March 19 to stockholders of record on February 19.
P2
11-*
![Page 20: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/20.jpg)
The corporation distributes additional shares of its own stock to its stockholders without receiving any payment in return.
Stock Dividends
Why a stock dividend?
•Can be used to keep the market price on the stock affordable.
•Can provide evidence of management’s confidence that the company is doing well.
HotAir, Inc.Common Stock
100 shares
$1 par
P2
11-*
![Page 21: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/21.jpg)
Small Stock Dividend● Distribution is ≤ 25% of the previously
outstanding shares.● Capitalize retained earnings for the market
value of the shares to be distributed.
Stock Dividends
Large Stock Dividend● Distribution is > 25% of the previously
outstanding shares.● Capitalize retained earnings for the minimum
amount required by state law, usually par or stated value of the shares.
P2
11-*
![Page 22: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/22.jpg)
Here is the stockholders’ equity section of Quest’s balance sheet prior to the
declaration of a small stock dividend.
Recording a Small Stock DividendP2
11-*
![Page 23: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/23.jpg)
On December 31, 2011, Quest declared a 2% stock dividend, when the stock was selling for $10 per share. The stock will be distributed to stockholders on January 20, 2012. Let’s make the December 31 entry.
Recording a Small Stock Dividend
100,000 × 2% = 2,000 × $10 = $20,000 2,000 × $1 par = $2,000
P2
11-*
![Page 24: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/24.jpg)
Before thestock
dividend.
After thestock
dividend.
P2
11-*
![Page 25: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/25.jpg)
Router, Inc. shows the following stockholders’ equity section just prior to issuing a large stock dividend.
Recording a Large Stock DividendP2
11-*
![Page 26: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/26.jpg)
On December 31, 2011, Router declared a 40% stock dividend, when the stock was selling for $8 per share. State law requires that large stock dividends be capitalized at par value per share.
50,000 × 40% = 20,000 shares × $1 par value = $20,000
Recording a Large Stock DividendP2
11-*
![Page 27: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/27.jpg)
A distribution of additional shares of stock to stockholders according to their percent ownership.
Common Stock
$10 par value
100 shares
OldShares
NewShares Common Stock
$5 par value
200 shares
Stock SplitsP2
11-*
![Page 28: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/28.jpg)
After the 2-for-1 split the stockholders’ equity section of the balance sheet looks like this .
No accountingentry is made.
Stock SplitsP2
11-*
![Page 29: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/29.jpg)
A separate class of stock, typically having priority over common shares in . . .● Dividend distributions● Distribution of assets in case of liquidation
Usually has a stated dividend rate
Normally has no voting rights
Preferred StockC 2
11-*
![Page 30: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/30.jpg)
Vs. NoncumulativeCumulative
Dividends in arrears must be paid before dividends may be paid on common stock.
Undeclared dividends from current and prior years do not have to be paid in future years.
Cumulative or Noncumulative Dividend
Most preferred stock is cumulative.
P2
11-*
![Page 31: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/31.jpg)
Example: Consider the following stockholders’ equity section of the balance sheet
The board of directors did not declare or pay dividends in 2011. In 2012, the board of directors declare and pay cash dividends of $42,000.
Cumulative or Noncumulative Dividend
P2
11-*
![Page 32: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/32.jpg)
Cumulative or Noncumulative Dividend
P2
11-*
![Page 33: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/33.jpg)
Reasons for Issuing Preferred Stock
■ To raise capital without sacrificing control
■ To boost the return earned by common stockholders through financial leverage
■ To appeal to investors who may believe the common stock is too risky or that the expected return on common stock is too low
P2
11-*
![Page 34: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/34.jpg)
On May 8, Whitt, Inc. purchased 2,000 of its own shares of stock in the open market for $8,000.
Purchasing Treasury Stock
Treasury stock is shown as a reduction in totalstockholders’ equity on the balance sheet.
P3
11-*
![Page 35: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/35.jpg)
On June 30, Whitt sold 100 shares of its treasury stock for $4 per share.
Selling Treasury Stock at Cost
$8,000 ÷ 2,000 shares = $4 cost per treasury share
P3
11-*
![Page 36: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/36.jpg)
On July 19, Whitt, Inc. sold an additional 500 shares of its treasury stock for $8 per share.
Selling Treasury Stock Above Cost
P3
11-*
![Page 37: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/37.jpg)
On August 27, Whitt sold an additional 400 shares of its treasury stock for $1.50 per share.
Selling Treasury Stock Below Cost
P3
11-*
![Page 38: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/38.jpg)
Total cumulative amount of reported net income less any net losses and dividends declared since the company started operating.
Statement of Retained EarningsC 3
11-*
![Page 39: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/39.jpg)
Legal Contractual
Most states restrictthe amount oftreasury stock
purchases to theamount of retained
earnings.
Loan agreementscan include
restrictions on paying
dividends below acertain amount ofretained earnings.
Restricted Retained EarningsC3
11-*
![Page 40: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/40.jpg)
A corporation’s directors can voluntarily limit dividends because of a special need for cash
such as the purchase of new facilities.
Appropriated Retained EarningsC3
11-*
![Page 41: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/41.jpg)
Correction of material errors in past years’ financial statements. If an amount is incorrectly expensed,
add amount to retained earnings.
Prior Period AdjustmentsC 3
11-*
![Page 42: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/42.jpg)
Statement of Stockholders’ Equity
This is a more inclusive statement than the statement of retained earnings.
C 3
11-*
![Page 43: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/43.jpg)
Options are given to key employees to motivate them to:● focus on company performance;● take a long-run perspective; and● remain with the company.
Stock OptionsC3
11-*
![Page 44: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/44.jpg)
Earnings per share is one of the most widely cited items of accounting information.
Earnings per Share
Basicearningsper share
= Net income - Preferred dividends Weighted-average common shares outstanding
A 1
11-*
![Page 45: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/45.jpg)
This ratio reveals information about the stock market’s expectations for a company’s future growth in earnings, dividends, and opportunities.
If earnings go up,will the market priceof my stock follow?
Price-Earnings
Price-earnings
ratio
= Market value per share
Earnings per share
A 2
11-*
![Page 46: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/46.jpg)
Tells us the annual amount of cash dividends distributed to common stockholders relative to the stock’s market price.
Dividend Yield
Dividendyield = Annual cash dividends per share
Market value per share
A 3
11-*
![Page 47: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/47.jpg)
Records amount of stockholders’ equity applicable to common shares on a per
share basis.
Book Value per Share—Common
Book value per common share =
Stockholders’ equity applicable to common shares
Number of common shares outstanding
A 4
11-*
![Page 48: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/48.jpg)
Records amount of stockholders’ equity applicable to preferred shares on a per
share basis.
Book Value per Share—Preferred
Book value per preferred share =
Stockholders’ equity applicable to preferred shares
Number of preferred shares outstanding
A 4
11-*
![Page 49: Sixth Edition John J. Wild - ACCOUNTING 101 Record the issuance of corporate stock. P2: Record transactions involving cash dividends, stock dividends, and stock splits. P3: …](https://reader034.fdocuments.net/reader034/viewer/2022051509/5ada8ba87f8b9add658ccc1b/html5/thumbnails/49.jpg)
End of Chapter 11
11-*