Financial Accounting: A User Perspective 6th Canadian Edition

chapter 11

SHAREHOLDERS' EQUITY

USER RELEVANCE

FORMS OF ORGANIZATION

Sole Proprietorship

Partnership

Corporation

Limited Liability Differences in the Different Forms of Organization

Taxation Differences in the Different Forms of Organization

Other Advantages and Disadvantages of the Different Forms of Organization

CORPORATIONS

SHARES

Common Shares

Preferred Shares

Accounting for the Issuance of Common Shares

Repurchased Shares

DIVIDENDS, STOCK SPLITS, AND EMPLOYEE STOCK OPTIONS

Cash Dividends

Property Dividends

Stock Dividends

Stock Splits

Employee Stock Options

STATEMENT OF RETAINED EARNINGS AND STATEMENT OF CHANGES IN EQUITY

Statement of Retained Earnings

Statement of Changes in Equity

FINANCIAL STATEMENT ANALYSIS

Book Value and Market Value

Price/Earnings Ratio

Return on Shareholders' Equity Ratio

SUMMARY

LEARNING OBJECTIVES

After studying this chapter, you should be able to:

1. Distinguish among the different types of business organizations and explain the advantages and disadvantages of each.
2. Describe the different types of shares and explain why corporations choose to issue a variety of share types.
3. Prepare journal entries for share transactions, including the issuance and payment of dividends.
4. Describe the different types of dividends and explain why companies might opt to issue one type of dividend rather than another.
5. Describe what a stock split is and explain how it is accounted for.
6. Describe what an employee stock option is and explain how it is accounted for.
7. Explain ...