From page 10-1 of the VLN, when a company sells shares of stock, those shares of stock are said to be:Group of answer choicesA. Authorized sharesB. Issued sharesC. Outstanding sharesD. Treasury shares Treasury Stock:PREFERRED STOCK-Not normally voting-Preference in dividends-Fixed dividend rate (% of par or specified amount)-Cumulative (dividends in arrears)-Convertible-Redeemable-Mandatory Redeemable preferred stock is treated as debt on thebalance sheetPar value or Stated value-legal capital-not market valuePaid-In Capital-Preferred stock (PAR Value x number of shares ISSUED)-Common Stock (PAR VALUE x number of shares ISSUED)- Additional Paid-in Capital “APIC" or Capital in excess of ParNo-par StockPaid in capital all goes into common stockPracticeA firm issues 50,000 shares of $0.10 par common stock for $10 pershare, record the issuance.A firm issues 50,000 shares of $100 par preferred stock for $110per share, record the issuance.A firm issues 50,000 shares of no par common stock for $10 pershare, record the issuance.TREASURY STOCK-Contra Equity (reduces SEà does NOT reduce common stock)-Issued but NOT outstanding-Recorded at COST-No voting rights-No dividend or distribution rightsEconomic Gain on sale of Treasury Stock (Resold for more thancost)-not shown as a GAIN-increase Additional paid in capitalEconomic Loss on sale of Treasury Stock (Resold for less thancost)-not shown as a LOSS-decrease Additional paid in capital if available, or, if not available-decrease Retained Earnings OWNERSHIP OF A CORPORATIONOverview of Stockholders' Equity-Source of financing (A= L+ SE)-Ownership of the corporation (A-L=SE)Stockholders' Equity on the Balance SheetPaid-in Capital + Retained Earnings – Treasury stockPART A: Invested Capital (Paid-in Capital)Invested capital is the amount of resources contributed to acompany by its owners.CorporationsStockholdersàBoard of DirectorsàCEOInitial Public Offering (IPO)STOCKHOLDER RIGHTS: to vote, receive dividends, and sharein the distribution of assetsADVANTAGES of a CORPORATION-limited liability-ability to raise capital and transfer ownershipDISADVANTAGES of a CORPORATION-double taxation-SEC regulation requirementsSTOCK (Common Stock and Preferred Stock)Number of SharesAuthorized Shares:Issued Shares:Outstanding Shares:Unissued Shares:Treasury Stock:

When the company sells the shares, those stock is said to be Issued shared and outstanding shares.…

From page 10-1 of the VLN, when a company sells shares of stock, those shares of stock are said to be: Group of answer choices A. Authorized shares B. Issued shares C. Outstanding shares D. Treasury shares

From page 10-1 of the VLN, when a company sells shares of stock, those shares of stock are said to be: Group of answer choices A. Authorized shares B. Issued shares C. Outstanding shares D. Treasury shares

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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