《会计专业英语》教材PPT (1)

Example:

If Kuick Corporation declared a $6, 000 dividend on December 15 to be paid on January 15 to holders of record as of January 1, the entries would be as follows:
Dr. Cash……………………..700, 000 Cr. Common Stock………….700, 000 However, in practice, many corporations may record the transaction this way: Dr. Cash……………………700,000 Cr. Common Stock at Par…………100, 000 Additional Paid-In Capital…..….600, 000
Part 3 Accounting for Main Business Transactions
Task 4 Operating Preparation Stage
Mini Case:
If you are the leader of a company, you are required to decide the way to collect money or raise capital for your business, which way will you choose? Using bond or stock? The financial executives in an organization need to have extensive knowledge about the various means of raising money. Identifying the needs for new funds and acquiring these funds are part of the function known as financial management.
Additional paid-in capital & Other paid-in capital
Example:

To illustrate the issuance of stock, let us consider Loren Corporation, which received a charter from the state authorizing the issuance of 200,000 shares of $1 par value common stock. If 100,000 shares of this stock were issued at price of $7 per share and the proceeds were received by Loren Corporation, this financing transaction could be recorded in either of two ways. The most useful way from the standpoint of statement users would be:
Contents:
Forms of business organization
Source of capital: owner’s equity Source of capital: debt
Fixed assets and depreciation
4.1 Forms of Business Organization
(1) Declaration of dividend on December 15: Dr. Retained Earnings…….....…6, 000 Cr. Dividends Payable (a liability account)……6, 000
(2) Payment of dividend on January 15: Dr. Dividends Payable…………6, 000 Cr. Cash………………………….6, 000

Sole proprietorship
A sole proprietorship is a business entity owned by one individual, this is a simple form for a business organization.

Partnership
A corporation is a legal entity with essentially perpetual existence.
4.2 Source of Capital: Owner’s Equity

Preferred stock & Common stock

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Paid-in capital & retained earnings
4.3 Source of Capital: Debt

A common source of debt capital is the issuance of bonds.
When an entity issues bonds, it assumes two obligations: 1. to repay the face amount, the principal. 2. to pay interest at a stated rate until the maturity date.
A partnership is a business with the same features as a proprietorship, except that it is owned jointly by two or more persons, called the partners.

Corporation