Objectives Owners Equity TKE Beta Pi Alumni Association

							Objectives: Equity
   Distinguish different types of ownership interest
    and describe their distinguishing features

   Perform the journal entries for the issuance of
    stock (both common and preferred) and the
    declaration of cash dividends

   Describe and perform the accounting for a stock
    dividend and a stock split

   Account for the repurchase and resale of a
    company’s own stock (treasury stock)              1
Types of Ownership Interest
   Common stock



   Preferred stock




                          2
Issuance of common stock
   Authorized



   Issued



   Outstanding

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Nike Common Stock




                    4
Dividends
   Date of declaration



   Date of record



   Date of payment
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P13-5: Papillardo Corp.
a.   Average issue price of preferred stock?



b.   How many shares of common stock are
     outstanding?

c.   Journal entry to issue common stock?


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P13-5: Treasury Stock
   What is it?



   What would be the entry to record all treasury
    stock currently held?



d. If treasury stock was reissued for $400,000.



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P13-5: Dividends
   Record the declaration of preferred dividends (e)




   Record the declaration of common cash
    dividends (f)




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P13-5: Stock Dividend
   What is it?



g. Record a 10% stock dividend when the
  price of the stock is $80.




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P13-5:
Earnings Per Share (EPS)
   Calculation?

   What does it represent?


h. If net income is $1,560,000 and no new shares were
   issued during the period, what is basic earnings per share?




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P13-5: Stock Split
   What is it?

   Assume a 3-for-2 stock split.
    i. How many shares outstanding?

    j. What effect on I/S, B/S, CF stat?

    k. What would you expect market price to be post split?



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