chapter 10
Investors who acquire preferred stock
1. have preference over commons tock. 2. have preference as to dividends.
advantage of equity financing include that
1. no repayment required 2. dividends are optional
The entry to record the issuance of preferred stock is
1.increase stockholders equity 2.similar to the issuance of common stock
preferred stock generally
HAS preference as to dividends.
a major advantage of the corporate form of ownership is ________ legal liability.
LIMITED
retained earnings are
incr. by net income sometimes called earned capital decreased by dividends
stock dividend
requires a journal entry
The number of shares issued represents the number of shares
sold.
date of record
stock records are finalized to determine which stockholders are to receive payment
the declaration of a dividend results in
increase in dividends increase in liability decrease in retained earnings after temporary accounts are closed.
the effect on the accounting equation of declaring a cash dividend includes
increase liabilities decrease stock. equity
Issuing 1,000 shares of 5%, $100 par value, cumulative preferred stock for $100 cash per share affects the accounting equation by
increase total assets incr. total stock. equity
issuing preferred stock
increases stock.equity similar to issuing common stock.
outstanding shares equals
issued shares-treasury shares
preferred stock carries over common stock
both for dividends and at liquidation
stock splits
cause the par value per share to change
stock splits and stock dividend
cause total se to remain the same
payment date
dividends payable is decreased
AnuU, Inc. sold 100,000 shares of the 1,000,000 shares it is allowed to sell. AnuU repurchased 10,000 of these shares. The number of shares ISSUED equals
100,000 shares
when does a corporation record an increase in dividends payable?
on the declaration date
Outstanding shares equals the number of shares
issued- the number of shares repurchased by the company.
another term for stockholders is
owners
declaration date
the board of directions officials approves a dividend.
When should a corporation record a liability for dividends on its cumulative preferred stock?
when dividends have been declared.