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Intermediate Accounting 2 Notes

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These are notes I took during my Intermediate Accounting 2 course. These notes were taken during lecture and are structured to help me remember certain journal entries. They helped me with homework and quizzes.

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  • January 10, 2023
  • 15
  • 2022/2023
  • Class notes
  • Carniol
  • All classes
All documents for this subject (1)
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loribethbeco
Stockholder’s Equity
common stock issuance and repurchases, dividends on common stock (Chapter 15)
Owner’s Equity=Net Assets (government)
At time 1, Mr. Spacely owns the assets after liab have been paid off
Also owns intangibles, not just Assets-Liab
-
Residual interest*
Common Stock- contract
-
Dividend
-
Voting
-
Acquisition and liquidation
1% of residual interest
Class A: voting (1)
Class B: voting (10)*
Class C: 0 votes
Blue Apron Class A stock valuable (no voting or dividends) due to consideration in mergers and
acquisitions
Right to sell shares to others is not val itself
Issued shares- shares sold over whole lifetime
Buybacks- taxed 2023 and on (does not cancel issued shares> goes to treasury shares)
Outstanding shares- # of shares owned by outside investors (issued-treasury)
Treasury shares- bought back shares
Par= placeholder, does not mean anything
Paid-in Capital- proceeds from sales of common stock
Entry ex:
Cash
Common stock sold at par
Additional Paid-In Capital
If par=0, all proceeds in Paid in Cap
Issuance costs paid from stock sale proceeds so never hits company’s balance sheet PRACTICE (entry for sale of common stock):
Blue Apron Holdings, Inc. sold 30 million shares of Class A common stock in its initial public
offering.
The offering price was $10 per share and the company paid issue costs of $0.55 per share.
Par value is $0.0001 per share.
Cash 283,500,000
30 mill x (10 - .55)
Common Stock @ par
3000
30 mill x $.0001
Additional Paid-In Capital
283,497,000
cash-common
stock @ par
Tesla Ex:
Common stock+additional paid in cap for one year - CS+additional paid in cap for other year=
proceeds company made
Payment of an expense with stock (without stock price):

Party Expense
6000
Common Stock at par
0
Add Paid in Cap
6000
Payment of an expense with stock price:

Party Expense
8000
CS @ par
400 (.10*4000)
Add Paid in Cap
7600 (8000-400)
Dividends……………………………………………………………………………………………………
Declaration Date- div becomes liability
Record Date- date you have to own share on to receive div
Ex-dividend date- last date you need to buy shares by to be a shareholder on record date
Payment Date- Div paid out
Share repurchases valuable
*Treasury shares
are
issued shares that the company
later bought back from shareholders
After a repurchase, shareholders who did not sell shares back own larger portion of company
Corporations record repurchase of shares in a contra-equity account “Treasury Stock”
Difference between Shares in treasury in two diff years gives you how much company spent on
dividends

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