BUS 321 Lecture Notes - Lecture 3: Debits And Credits, Capital Account, Dividend Policy

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 321
• Professor: Jaqueline Faubert

Document Summary

Articles of incorporation: name, location, classes and authorized share, share transfer restrictions, # directors, business restrictions share proportionally in profits/losses, management (vote directors), assets upon liquidation, new share issue of same class (pre-emptive right) Cs: share equally in profits, management, assets upon liquidation, basic ownership interest. Ps: non-voting, priority on dividends, asset upon liquidation. Retractable: shareholder sell back to company (debt) Convertible: corporation/shareholder exchange for cs at predetermined ratio. Participating: participate with cs for distributions > ps rate. Cumulative: dividends not paid => made up later year before cs. If rights + restrictions not described in articles of incorporation: presumed same as cs. Common/preferred = descriptive, not legal terms outstanding shares: authorized, issued, outstanding. Basic: non cash: use fv of asset received/given (more readily apparent: recent, independent) Subscription: new, small companies go public/ offer shares to employees ( installment) Share subscription receivable: aspe: contra equity account (more preferable)/ ca.