Accounting ACCT 2610 Lecture Notes - Lecture 11: Initial Public Offering, Treasury Stock, Dividend
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27 Nov 2016
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Corporations can raise large amounts of capital because large and small investors can participate in ownership. Corporations are governed by a board of directors elected by the stockholders. Receive a proportional share of the distribution of remaining assets upon liquidation. The authorized number of shares is the maximum number of shares of a corporation"s capital stock that can be issued as specified in the charter. Issued shares represent the total number of shares of stock that have been sold. Stock that has been bought back is called treasury stock. Outstanding shares refer to the total number of shares of stock that are owned by stockholders. Outstanding shares = issued shares - treasury stock. Earnings per share = net income / average number of common shares outstanding. Most corporations issue two types of stock: common stock and preferred stock. All issue common stock but only some issue preferred stock. Common stock is the basic voting stock issued by a corporation.
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Shelby Corporation was organized in January 2013 to operate anair conditioning sales and service business. The charter issued bythe state authorized the following capital stock: |
Common stock, $1 parvalue, 200,000 shares. |
Preferred stock, $10par value, 6 percent, 50,000 shares. |
During January andFebruary 2013, the following stock transactions werecompleted: |
a. | Collected $841,000 cash andissued 29,000 shares of common stock. |
b. | Issued 19,500 shares ofpreferred stock at $39 per share; collected in cash. |
Net income for 2013 was $59,000;cash dividends declared and paid at year-end were $10,000. |
Required: |
Prepare the stockholdersâ equity section of the balance sheet atDecember 31, 2013. This is what i have Contributed capital Preferred stock issued [19500*10] 195000 Additional preferred stock paid in capital [19500*29] 565500 Common stock issued [29000*1] 29000 Additional common stock paid in capital 812000 Total Contributed Capital 1601500 What are the retained earnings/net income and the total stockholders equity? Its not add: Net Income 59000 Less: dividends (10000) I tried that and it didnt work. where am I going wronghere? |