BU127 Chapter Notes - Chapter 12: Authorised Capital, Share Capital, Retained Earnings
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BU127 Full Course Notes
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Bu127 chap 12 reporting and interpreting owner"s equity. Shareholders have the following rights: voting (can occur by proxy, proportionate distribution of profits aka dividends, proportionate distribution of assets in a liquidation. Authorized shares: the max # of shares that can be sold to public. Issued shares + unissued shares = authorized: issued shares = outstanding + treasury, treasure shares = shares that have been reacquired by the corporation. If there are preferred dividends, the amount is subtracted from profit. Measures the return on investment that is based on the number of shares outstanding instead of the dollar amounts reported on the income statement. Retained earnings: generated by profit-making activities of the company. Contributed capital: reflects the amount invested by shareholders: two components, amount initially received from sales of shares, contributed surplus that reflects contributions made by shareholders in excess of the amounts credited to share capital accounts. a.