大學課程《會計英語》課件：Chpter-8-Unit-2

Unit2AccountingforOwners’EquityinDifferentFormsofOrganization

LearningObjectivesAfterstudyingthisunit,youshouldbeableto:Describetheprimaryfeaturesofaccountingforowners’equityinaproprietorshipandapartnership.Defineauthorizedstock.Distinguishbetweenparvalueandmarketvalue.Explaintheaccountingforparandno-parcommonstockissuedforcash.Identifytheownershiprightsofowningashareofcommonstockinacorporation.ContinuedDescribethecomponentsofowners’equityinacorporation.Definetreasurystockandthepurposeofacquiringtreasurystockbyacompany.Contrastcashdividendsandstockdividends.Tellthedifferencebetweenstockdividendsandstocksplit.KeyTermsdrawingaccount提款賬戶earningpower贏利能力authorizedstock法定股本closelyheldcompanies不公開招股公司publiclyheldcorporation公開招股公司Parvalue面值statedvalue設定價值residualclaim剩余索取權Continuedpaid-in(contributed)capital繳入股本

retainedearnings(earnedcapital)留存收益treasurystock庫藏股declarationdate（股利）宣告日期recorddate列冊日期paymentdate股利支付日stocksplit股票分割AccountingforOwners’EquityofDifferentFormsofOrganizationsMostaccountingprinciplesapplytoallthreeformsoforganizationandthemainareaofdifferenceliesinaccountingforowner’sequity.Withasoleproprietorship,havingasingleownermeansthereislittlereasonfordistinguishingbetweentheinvestedcapitalandprofitsretainedinthebusinessforinvestmentpurposes.ContinuedAswithasoleproprietorship,theregenerallyisnorealdistinctionbetweencapitalcontributedandprofitsretainedinapartnership.Withcompanies,thesituationisdifferentbecausetheirformationisgenerallygovernedbylegislationandtheiroperationissubjecttogreaterregulation,thereisnormallyacleardistinctionmadebetweencontributedcapitalandprofitsretainedinthebusiness.AccountingfortheOwners’EquityinaSingleProprietorshipTheaccountingrecordsforasingleproprietorshipdonotincludeaccountsforcapitalstock,retainedearnings,ordividends.Insteadoftheseaccounts,acapitalaccountandadrawingaccountaremaintainedfortheowner.Thetitleofthecapitalaccountincludesthenameoftheowner,as,forexample,BillWhite,Capital.CapitalAccountThecapitalaccountiscreditedwiththeamountoftheproprietor’soriginalinvestmentinthebusinessandalsowithanysubsequentinvestments.Whentheaccountsareclosedattheendofeachaccountingperiod,theIncomeSummaryaccountisclosedintotheowner’scapitalaccount.ThustheCapitalaccountiscreditedwiththenetincomeearnedordebitedwiththenetlossincurred.DrawingAccountAwithdrawalofcashorotherassetsbytheownerreducestheowner’sequityinthebusinessandcouldberecordedbydebitingtheowner’scapitalaccount.However,aclearerrecordiscreatedifaseparatedrawingaccountismaintained.ThisDrawingaccountreplacestheDividendsaccountusedbyacorporation.TheDrawingAccountisDebitedforanyoftheFollowingTransactions:(1)Withdrawalsofcashorotherassets.Iftheproprietorofaclothingstore,forexample,withdrawsmerchandiseforpersonaluse,theDrawingaccountisdebitedforthecostofthegoodswithdrawn.TheoffsettingcreditistothePurchaseorInventoryaccount.(2)Paymentoftheproprietor’spersonalbillsoutofthebusinessbankaccount.(3)Collectionofanaccountreceivableofthebusiness,withthecashcollectedbeingretainedpersonallybytheproprietor.WithdrawalsarenotExpensesWithdrawalsbytheproprietorarenotexpensesofthebusiness.Expensesareincurredforthepurposeofgeneratingrevenue,andawithdrawalofcashorotherassetsbytheproprietordoesnothavethispurpose.FinancialStatementsPresentationofaSoleProprietorshipBalancesheetpresentationIncomestatementpresentationBalanceSheetPresentationThebalancesheetforasingleproprietorshipshowstheentireownershipequityasasingledollaramountwithoutanyefforttodistinguishbetweentheamountoriginallyinvestedbytheownerandthelateroperations.IncomeStatementPresentationTheincomestatementofaproprietorshipdiffersfromthatofacorporationintwosignificantrespects.First,theincomestatementforasingleproprietorshipdoesnotincludeanysalaryexpenserepresentingmanagerialservicesrenderedbytheowner.Onereasonfornotincludingasalarytotheowner-manageristhefactthatindividualsinsuchapositionareabletosettheirownsalariesatanyamounttheychoose.Theuseofanunrealisticsalarytotheproprietorwouldtendtodestroythesignificanceoftheincomestatementasadeviceformeasuringtheearningpowerofthebusiness.ContinuedTheseconddistinctivefeatureoftheincomestatementofasingleproprietorshipistheabsenceofanyincometaxesexpense.Sinceaproprietorshipisnotrecognizedasalegalentityseparatefromitsowner,thebusinessdoesnotfileitsownincometaxreturnorpayanyincometaxes.However,theproprietormustincludetheincomeofthebusinessonhisorherindividualincometaxreturn,alongwithanytaxableincomefromothersources.PartnershipAccountingPartnershipaccountingissimilartothatinsingleproprietorship,exceptthatseparatecapitalanddrawingaccountsaremaintainedforeachpartner.Adistinctivefeatureofpartnershipaccountingisthatthenetincomeofthebusinessmustbedividedamongthepartnersinthemannerspecifiedbythepartnershipagreement.Partnersmaydividenetincomeequally.Theycan,however,sharenetincomeinanywaytheywish.Factorsthatpartnersmightconsiderinarrivingatanequitableplantodividenetincome

(1)Theamountoftimeeachpartnerdevotestothebusiness.(2)Theamountofcapitalinvestedbyeachpartner,and(3)Anyothercontributionbyeachpartnertothesuccessofthepartnership.Netincome,forexample,maybesharedinanyagreedratiosuchasintheratioofbeginningcapital,orinafixedratioafteranallowanceismadetoeachpartnerforsalaryandinterestoncapitalinvested.AccountingIssuesinRelationtoCorporationsAcorporationobtainsitsequitycapitalbyissuingsharesofcapitalstock.Theownershiprightsinacorporationaregenerallyrepresentedbyanumberofunitsofshares.Acorporationmayissueseveraldifferenttypesofcapitalstock.AuthorizationandIssuanceofCapitalStockTheamountofstockthatacorporationisauthorizedtosellasindicatedinitscharteriscalledauthorizedstock.Theauthorizationofcommonstockdoesnotresultinaformalaccountingentry.Thereasonisthattheeventhasnoimmediateeffectoneithercorporateassetsorstockholders’equity.However,thecorporationmustdiscloseinthestockholders’equitysectionofthebalancesheetthenumberofsharesauthorizes.DirectIssueandIndirectIssueAcorporationcanissuecommonstockdirectlytoinvestors.Alternatively,itcanissuecommonstockindirectlythroughaninvestmentbankingfirmthatspecializesinbringingsecuritiestotheattentionofprospectiveinvestors.Directissueistypicalincloselyheldcompanies.Indirectissueiscustomaryforapubliclyheldcorporation.ParandNo-parValueStocksParvaluestockiscapitalstockthathasbeenassignedavaluepershareincorporatecharter.No-parvaluestockiscapitalstockthathasnotbeenassignedavalueinthecorporatecharter.No-parvaluestockisquitecommontoday.Sometimestheboardofdirectorsofcompaniesassignsastatedvaluetotheno-parshares.CommonStock

Whenchartered,thecorporationmaybeginsellingsharesofstock.Whenacorporationhasonlyoneclassofstock,itisidentifiedascommonstock.Commonstockholdershavetherightsto(1)voteinelectionofboardofdirectorsatannualmeetingandvoteonactionsthatrequiresstockholderapproval;(2)sharethecorporateearningsthroughreceiptofdividends;(3)keepthesamepercentageownershipwhennewsharesofstockareissued;and(4)shareinassetsuponliquidationinproportiontotheirholdings.Thisiscalledaresidualclaimbecauseownersarepaidwithassetsthatremainafterallclaimshavebeenpaid.PreferredStockPreferredstockhascontractualprovisionsthatgiveitpreferenceorpriorityovercommonstockincertainareas.Typically,preferredstockholdershaveapriorityinrelationtodividendsandassetsintheeventofliquidation.However,theysometimesdonothavevotingrights.FinancialStatementsPresentationThestockholders’equitysectionofacorporation’sbalancesheetincludes(1)paid-in(contributed)capitaland(2)retainedearnings(earnedcapital)Thedistinctionbetweenpaid-incapitalandretainedearningsisimportantfrombothalegalandaneconomicpointofview.Paid-incapitalistheamountstockholderspaidtothecorporationinexchangeforsharesofownership.Retainedearningsisearnedcapitalheldforfutureuseinthebusiness.TheEntrytoRecordtheIssuanceofStockTheissuanceofstockaffectsonlypaid-incapitalaccounts.Whenacompanyrecordstheissuanceofcommonstockforcash,itcreditstheparvalueofthesharestoCommonStock,andrecordsinaseparatepaid-incapitalaccounttheportionoftheproceedsthatisaboveparvalue.TheJournalEntryAssumeacompanyissues1,000sharesof$1parvaluecommonstockforcashat$5pershare:Cash5000CommonStock1000Paid-inCapitalinExcessofParValue4000IssueNo-parValueStockWhencompaniesissueno-parvaluestockwithastatedvalue,thestatedvalueistreatedinthesamewayastheparvalue.Ifacompanyissuesno-parvaluestockthatdoesnothaveastatedvalue,thenitcreditstotheCommonStockaccountthefullamountreceived.Insuchacase,thereisnoneedforthePaid-inCapitalinExcessofStatedValueaccount.Theentryfortheissuanceofpreferredstockissimilartotheentryforcommonstock.TreasuryStockTreasurystockisacorporation’sownstockthathasbeenissued,fullypaidfor,andreacquiredbythecorporationandisbeingheldinitstreasuryforfutureuse.Acorporationmayacquiretreasurystockforvariousreasons:ReasonsforAcquiringTreasuryStock(1)toreissuethesharestoofficersandemployeesunderbonusandstockcompensationplans;(2)toincreasetradingofthecompany’sstockinthesecuritiesmarket.Companiesexpectthatbuyingtheirownstockwillsignalthatmanagementbelievesthestockisunderpriced,whichtheyhopewillenhanceitsmarketvalue;Continued(3)tohaveadditionalsharesavailableforuseinacquiringothercompanies;and(4)toreducethenumberofsharesoutstandingandtherebyincreaseearningspershare.DividendsAdividendisadistributionbyacorporationtoitsstockholdersonaproratabasis.Proratameansthatifyouown,say,10%ofthecommonshares,youwillreceive10%ofthedividend.FormsofDividendsDividendscantakefourformsamongwhichcashdividendsandstockdividendsarepredominatinginpractice:(1)cash;(2)property;(3)promissorynotetopaycash;and(4)stock.Acashdividendisadistributionofcashtostockholders.ImportantDatesRelatingtoDividendsThreedatesareimportantinconnectionwithdividends:thedeclarationdatetherecorddateandthepaymentdateTheDeclarationDateOnthedeclarationdate,theboardofdirectorsformallyauthorizesthecashdividendandannouncesittostockholders.Thedeclarationofacashdividendcommitsthecorporationtoabindinglegalobligation.Thus,thecompanymustmakeanentrytorecognizethedecreaseinretainedearnings(orincreaseinCashDividendswhichwillbeclosedtoRetainedEarningslater)andtheincreaseintheliabilityDividendsPayable.TheRecordDateAttherecorddate,thecompanydeterminesownershipoftheoutstandingsharesfordividendpurposes.Thestockholders’recordsmaintainedbythecorporationsupplythisinformation.Noentryisrequiredontherecorddate.ThePaymentDateOnthepaymentdate,thecompanymailsdividendcheckstothestockholdersonrecordandrecordsthepaymentofthedividend.TheentryincludesadebittoDividendsPayableandacredittoCash.StockDividendAstockdividendisadistributionofthecorporation’sownstocktostockholders.Whereasacashdividendispaidincash,astockdividendispaidinstock.Astockdividendresultsinadecreaseinretainedearningsandanincreaseinpaid-incapital.Unlikeacashdividend,astockdividenddoesnotdecreasetotalstockholders’equityortotalassets.EffectofStockDividendsTheeffectofstockdividendsisatransferofaportionofretainedearningstopaid-incapitalandanincreaseinthenumberofoutstandingshares.Ithasnoeffectontheparorstatedvaluepershare.Becauseastockdividenddoesnotresultinadistributionofassets,manyviewitasnothingmorethanapublicitygesture.WhyIssueStockDividendsStockdividendsareoftenissuedbycompaniesthatdonothaveadequatecashtoissueacashdividend.Corporationsgenerallyissuestockdividendsforoneofthefollowingreasons:Continued(1)tosatisfystockholders’dividendsexpectationswithoutspendingcash;(2)toincreasethemarketabilityofthestockbyincreasingthenumberofsharesoutstandingandtherebydecreasingthemarketpricepershare;and(3)toemphasizethatthecompanyhaspermanentlyreinvestedinthebusinessaportionofstockholders’equity,whichthereforeisunavailableforcashdividends.StockSplitsAstocksplit,likeastockdividend,involvestheissuanceofadditionalsharesofstocktostockholdersaccordingtotheirpercentageownership.However,astocksplitresultsinareductionintheparorstatedvaluepershare.ThePurposeofaStockSplitThepurposeofastocksplitistoincr