ACC 305 Lecture Notes - Lecture 28: Treasury Stock, Retained Earnings, Preferred Stock

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17 Aug 2019
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Contributed capital is recognized when the corporation raises capital by issuing shares directly to shareholders. Can involve as many as four or more components. Treasury stock (repurchased stock, reduces outstanding shares) Preferred stock (different ownership rights from common stock) Example: crosley corporation sold 100 shares of its par common stock for per share. The journal entry to record the transaction is as follows: Earned capital consists of retained earnings and accumulated other comprehensive income. Retained earnings is the total amount of corporate net income that has been earned but not been distributed to shareholders as dividends. Deficit arises when cumulative net losses and/or dividends exceed cumulative net income. Accumulated other comprehensive income (loss) is the cumulative amount of other comprehensive income (or loss) Noncontrolling interests arise when a parent company consolidates financial statements of a less-than-100%-owned subsidiary company. Financial statements must include a disclosure of the ending balances and the changes in its shareholders" equity accounts.

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