ACCT 352 Lecture Notes - Market Price, Stock Split, Underwriting

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scarletcattle835

22 May 2012

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Document Summary

Owner"s equity in a corporation is defined as se or corporate capital. The following four categories normally appear as part of the se: Contributed capital is the total amount that shareholders provide to the corporation of it to use in the business. The earned caital is the capital that is created by the business operating profitability. The distinction between both is important on both an econ and legal level. Special characteristics that impact on accounting are corporate law, share capital system and limited liabilitiy. Anyone who wants to establish a corporation must submit articles of incorporation to the provincial or fed gov, depending on whether the person wants to do business in a specific province or across the country. Charter is issued, and the corporation is recognized as a legal entity under the relevant business corporation act. Articles of incorporation specify such things such as: All the shares of the corporation are grouped by classes (class a, b).

Related Questions

Ownersâ equity in a corporation is defined as stockholdersâequity, shareÂholdersâ equity, or corporate capital. The followingcategories normally appear as part of stockholdersâ equity.

a. Capital stock.

b. Additional paid-in capital.

c. Retained earnings.

d. Stock Dividend

e. Treasury Stock

Please define each term and provide an example of each. Howwould you prepare a journal entry if any of these amounts wereincreased from a transaction?

1. Can shareholders of a C corporations deduct its lossesagainst corporation's E&P passed to its shareholders asdividends (i.e. income of shareholders)?

2. When can a C (regular) corporation's corporate veil bepierced resulting in its shareholders being personally liable forcorporationâs actions?

3. How is the income of the following business entitiestaxed?

â¢Sole proprietorship

â¢C (regular) corporation

â¢Partnership

â¢Limited liability corporation (LLC)

â¢S corporation

4. Kent and Craig, who want to start a horse-training business,spoke to an insurance agent about getting insurance to coverpotential liabilities, but were told that they could not getliability insurance because of the high risk nature their proposedbusiness. What business entities would you recommend to Kent andCraig? Why?

Please answer all the questions above.