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Financial Accounting: Tools for Business Decision Making, 7th Edition by Donald E. Kieso, Jerry J. Weygandt, Paul D. Kimmel

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CHAPTER 11

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REPORTING AND ANALYZING STOCKHOLDERS' EQUITY

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LEARNING OBJECTIVES

After studying this chapter, you should be able to:

  1. Identify and discuss the major characteristics of a corporation.
  2. Record the issuance of common stock.
  3. Explain the accounting for the purchase of treasury stock.
  4. Differentiate preferred stock from common stock.
  5. Prepare the entries for cash dividends and understand the effect of stock dividends and stock splits.
  6. Identify the items that affect retained earnings.
  7. Prepare a comprehensive stockholders' equity section.
  8. Evaluate a corporation's dividend and earnings performance from a stockholder's perspective.

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Feature Story

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OH WELL, I GUESS I'LL GET RICH

Suppose you started one of the fastest-growing companies in the history of business. Now suppose that by “going public”—issuing stock of your company to outside investors who are foaming at the mouth for the chance to buy its shares—you would instantly become one of the richest people in the world. Would you hesitate?

That is exactly what Mark Zuckerberg, the founder of Facebook, did. Many people who start ...

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