ACCT1511 Lecture 3: Financial Statements
20 Nov 2018
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Shareholder"s equity = share capital + retained profits + reserves. Share capital is what we put in. Retained profits are what the company has made (profits) for shareholders. Represents contributions by shareholders of the company. Journal entry for the issue of 3 million shares for each would be: Types of share you will see traded on share markets: Issue to general public, payable in full on application. Institutional investors are nonbank individuals or organisations who trade securities in quantities large enough to qualify for preferential treatment. Firm is too young to gain access to public markets: the venture capitalist . Journal entry for the issue of 200,000 ordinary shares for . 40 each to an institutional investor: Share issues - public: initial public offering (ipo) Take advantage of investors who have money. Issue to general public by way of prospectus, payable in full on application. Example: gordon ltd issues 200,000 ordinary shares for . 20 each.
