Category Archive for: Stockholders’ Equity: Paid-in Capital

No Profit or Loss on Treasury Stock Transactions Notice

to the Additional Paid-in Capital: Common Stock account. that no gain or loss is recognized on treasury stock transactions, even when the shares are reissued price .above .or below cost. A corporation earns profits by selling goods and services to outsiders, not by-issuing or reissuing shares of its own capital stock.. When treasury shares are…

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Stock Splits

Over time, the. market price of a corporation s Britney stoke in value so much that it becomes top expensive for many investors, When this happens.u corporation may sociopolitical Dy increasing the inhere. its shareholdings outstanding. The presuppose Astor(split<> reduce substantially the market price’ of the common stock, with the intent of making it more affordable…

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Accounting by the Investor From theinvestor’s point of view, shares in a publicly owned

Company are an asset, usually termed Marketable Securities.To the investor, the current market value of securities owned is far more relevant than the original issue price or than the securities’ par values or book values. The market value indicates what the securities are worth today. Changes in market value directly affect the investor’s solvency, financial…

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Cash Effects

In a statement of cash flows, transactions with the stockholders of a corporation are classified as financing activities. Thus the issuance of capital stock for cash represents a receipt from financing activities. contributions of cash to stockholders-including the payment of cash dividends represent a cash outlay. which is also classified under financing activities. Transactions with…

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Other Features of Preferred Stock ‘Occasionally you may e-ncounter preferred stock

with some very unusual characteristics. For example” there, are “participating per ferrets allowing preferred stockholders to participate in increases in the common  stock dividend: There also are· “super preferred,” granting enormous voting rights perhaps the controlling interest the preferred stockholders. And there are- “redeemable preferreds,” allowing preferred shareholders to their shares back to the corporation at an…

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Common Stocks and Preferred Stocks

If stock is issued by a corporation for less than par; the account Discount-on Capital  Stock should be debited for the difference between the issuance price and the par value. The issuance of stock at a discount is seldom encountered; it is illegal in many states. No-Par Stock Some states allow corporations to issue stock…

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PAID-IN CAPITAL OF A CGRPORATION

Account ‘or paid-In capital and prepare the ,equity section of Ii corporate balance sheet. . Stockholders’ equity of a corporation is normally increased in-one of two.ways: (I) from. . contributions by investors in exchange for capital stock=-called paid-In capital or contributed capital, and (2) from the retention of profits earned by the corporation over .…

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Management

Corporation is appointed (hired) by the board of directors. These individuals’ are called the ‘corporate officers, or, more simply, “top management.” Individual stockholders do not have the right to transact corporate business unless they have been properly appointed to a managerial post. The top level of management usually includes a chief executive officer (CEO) or…

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FORMATION OF A’CORPORATION”

In the United States, a corporation is brought into existence under the laws of a particular state. The state in which ‘the corporation is formed is’ called the state of incorporation, The state of incorporation is not necessarily where the corporation does business. Rather, a state often is selected because of the leniency of its…

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MICROBREWS-WITHOUT THE FROTH

Once the total of Walt’ Street, U.S. microbrewery-young companies that produce  global brewery-have lost more titan two-thirds of their market value’ since a pack of then  In late 1995, melanges hive interpolated Investors, Pyramid Breweries, which Painkiller look at $19 on Dec12, 1995, now trad~S at 3. And Pete’s Brewing, taken public at $18 tv…

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