Transcript Chapter 11

LESSON 11-1
Starting a Corporation
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
2
TERMS REVIEW
page 322
 Corporation – organization with legal rights of a person and
that may be owned by many people
 board of directors – group elected by stockholders to run the
company
 articles of incorporation – written application requesting
permission to form a corporation
 Charter – Approved articles of incorporation
 common stock – stock that does not give owners preference
to earnings but does give voting rights
 preferred stock – stock that does give owners preference to
earnings but no voting rights
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 11-1
3
TERMS REVIEW
page 322
 stock certificate – paper that shows number of shares, issue
date, certificate number, and name of stockholder
 par value – value assigned to a share of stock and printed on
the stock certificate
 par-value stock – share of stock that has authorized value
printed on it
 no-par-value stock – share of stock that has no authorized
value printed on the stock certificate
 stated-value stock – no par value stock that is assigned a value
by a corporation
 organization costs – fees and other expenses of organizing a
corporation
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 11-1
4
ARTICLES OF INCORPORATION
1
page 315
1. Nature of
business.
2
2. Types of
stock
authorized.
3
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
3. Initial
directors.
LESSON 11-1
5
ARTICLES OF INCORPORATION
1
2
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
page 316
1. Names of
incorporators.
2. Signatures of
incorporators.
LESSON 11-1
6
STOCK CERTIFICATES
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
page 317
LESSON 11-1
7
TRANSACTIONS INCURRED WHEN
STARTING A CORPORATION
1
2
3
4
page 319
5
1. Write the date.
2. Enter the account title.
3. Record the receipt numbers.
4. Write the credit amount.
5. Write the debit amount.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 11-1
8
ORGANIZATION COSTS OF A
CORPORATION
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
page 320
LESSON 11-1
LESSON 11-2
Stock Subscriptions and
the Balance Sheet
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
10
JOURNALIZING A STOCK
SUBSCRIPTION
page 324
2
3
1
5
4
6
1. Write the date.
2. Enter the account debited.
3. Record memorandum number.
4. Enter debit amount.
5. Enter the account credited.
6. Enter credit amount.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 11-2
11
BALANCE SHEET OF A NEWLY
FORMED CORPORATION
page 325
1
2
1. List intangible assets as the last category of assets.
2. List sources of paid-in capital.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 11-2
12
JOURNALIZING CASH RECEIVED
FOR A STOCK SUBSCRIPTION
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
page 326
LESSON 11-2
13
JOURNALIZING ISSUANCE OF STOCK
PREVIOUSLY SUBSCRIBED
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
page 326
LESSON 11-2
14
TERMS REVIEW
page 327
 subscribing for capital stock
 intangible assets
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 11-2
LESSON 11-3
Calculating and Journalizing
Dividends for a Corporation
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
16
TERMS REVIEW
page 332
 declaring a dividend – an action by the board of
directors to pay stockholders a portion of its earnings
 date of declaration – The date that the dividend
payment is voted on and approved
 date of record – The date that determines which
stockholders are to received dividends – whoever
holds the stock on that date gets the $
 date of payment – Date in which dividends are
actually to be paid
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 11-3
17
DIVIDENDS
page 328
Calculating Value of Preferred Stock
Number of
Preferred Shares
1,000
×
Par Value
=
Value of
Preferred Stock
×
$100.00
=
$100,000.00
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 11-3
18
DIVIDENDS
page 328
Calculating Value of Common Stock
Number of
Common Shares
16,000
×
Stated Value
=
Value of
Common Stock
×
$20.00
=
$320,000.00
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 11-3
19
DIVIDENDS
page 329
Calculating Dividend of Preferred Stock
Value of
Preferred Stock
$100,000.00
×
Preferred
Dividend Rate
=
Preferred
Dividend Amount
×
8%
=
$8,000.00
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 11-3
20
DIVIDENDS
page 329
Calculating Amount Available for Common Dividends
Total Amount
Available for
Dividends
$24,000.00
–
Preferred
Dividend Amount
=
Amount Available
for Common
Dividends
–
$8,000.00
=
$16,000.00
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 11-3
21
DIVIDENDS
page 329
Calculating Dividend Rate for Common Stock
Common Dividend
Amount
÷
Value of
Common Stock
=
Common Dividend
Rate
$16,000.00
÷
$320,000.00
=
5%
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 11-3
22
JOURNALIZING DECLARATION OF
DIVIDEND
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
page 330
LESSON 11-3
23
JOURNALIZING PAYMENT
OF A DIVIDEND
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
page 330
LESSON 11-3