(1)
The claims of owners on a company’s resources, after the liabilities are paid off, are referred to as stockholders’ equity. Therefore, stockholders’ equity is sometimes referred to as net worth of owners or shareholders or stockholders.
Share issue cost: Cost such as legal fee, promotional charge, and accounting services incurred for the purpose of share issuance would reduce the net cash proceeds from the sale of shares.
To journalize: The issuance of shares.
(2)
Stock Dividends: It refers to the payment of dividends by a company to its existing shareholders, in the form of additional shares rather than cash. Stock dividends are paid, when there is inadequate cash available in the company.
Declaration date: The date on which the board of directors of a corporation announces officially to distribute the dividends to its shareholders is referred as declaration date.
To Journalize: The declaration of share dividend.
(3)
To Journalize: the payment of the dividend on December 31, 2018.
(4)
Retirement of shares:
Buy back of shares from the shareholders by paying cash and obtaining the status of “authorized but unissued shares” is known as retirement of shares.
To Journalize: The retirement of the shares.
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Intermediate Accounting
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