Chapter 11Corporations: Organization, Share Transactions, Dividends, and Retained Earnings



Learning Objectives

After studying this chapter, you should be able to:

1 Identify the major characteristics of a corporation.

2 Record the issuance of ordinary shares.

3 Explain the accounting for treasury shares.

4 Differentiate preference shares from ordinary shares.

5 Prepare the entries for cash dividends and share dividends.

6 Identify the items reported in a retained earnings statement.

7 Prepare and analyze a comprehensive equity section.


Feature Story

To the Victor Go the Spoils

You never know where a humble start might take you. One of the most recognized brands in the world began in 1924 in the German “wash kitchen” of the founder's mother. Adolf “Adi” Dassler was committed to the idea of providing high-quality, sport-specific shoes to athletes. He stitched together canvas and whatever else he could find in post-World War I Germany to create his shoes. In the early years, he was joined by his brother. They were so dedicated to their company that they sometimes ran their equipment with electricity generated by riding an exercise bicycle.

Just like today, success in the early years ...

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