AFM101 Chapter Notes - Chapter 12: Issued Shares, Market Price, Stock Split

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM101
• Professor: Donna Psutka

Document Summary

For most corporations, shareholders" equity includes two primary sources: contributed capital, which reflects the amount invested by shareholders. Amounts initially received from sale of shares: contributed surplus that reflects contributions made by shareholders in excess of the amounts credited to share capital amounts, retained earnings generated by the profit-making activities of the business. The cumulative amount of net earnings earned since the corporation"s organization, less the cumulative amount of dividends paid by the corporations since the corporation"s organization. Most generate from retained earnings not shareholders" equity. A corporation is a distinct entity meanings it enjoys a continuous existence, separate and apart from its owners. It may own assets, incur liabilities, expend and contract in size, sue others, be sued, and enter into contracts independent of its shareholders. Owners of common shares of a corporation receive the following benefits: a voice in management. They may vote at the shareholders" meeting: dividends.