ACG 2021

1. ACG 2021 Chapter 9 Summary

2. Elements of Stockholders Equity • Paid in Capital • Preferred Stock • Common Stock • Additional Paid in Capital • Total Paid In Capital • Retained Earnings • Treasury Stock • Total Stockholders Equity

3. Preferred Stock Characteristics • Non-Voting • Dividends 1st • Stated as a % • 10% of par value • If Par Value is $100, Dividend = $10 • or $ amount • $4 per share • Assets 1st

4. Common • Issued with Par Value • Cash xxxx • Common Stock xxxx • Additional Paid in Capital xxxxx • Issued without Par Value • Cash xxxx • Common Stock xxxx

5. Treasury Stock • Repurchase of Companies own stock • Contra Stockholders Equity • Purchase of Shares: • Treasury Stock xxxxx • Cash xxxxx • Sale of Shares: • Gain • Cash xxx • Treasury Stock xxx • Additional PIC xxx • Loss • Cash xxx • Retained Earnings xxx • Treasury Stock xxx

6. Dividends • Reduce Retained Earnings • Cash Dividends (3 Dates, 2 Journal Entries) • Date of Declaration • Retained Earnings xxxx • Dividend Payable xxxxx • Date of Record • Owners of stock at this date will receive dividend • No Entry • Date of Payment • Dividend Payable xxxx • Cash xxxxx

7. Dividends • Stock Dividends • Small, 25% or less • Record at Market Value • Large > 25% • Record at Par • Retained Earnings xxxxx • Common Stock xxxxx • Additional PIC xxxxx (if small dividend) • Effect on Stockholders Equity = 0

8. Stock Split • No Transaction • No Effect on Stockholders Equity • Increases # of Shares, Authorized, Issued and Outstanding • Reduces Market value of Stock

9. Ratios • Return on Assets = • Net Income + Interest Expense • Average Total Assets • Return on Equity = • Net Income – Preferred Dividends • Average Common Stockholders Equity