Owner's Equity Paper

Running Head: owners Equity report card Owners Equity Paper ACC/423 Intermediate financial accountancy 111 Margaret McAskill 10/24/11 Owners Equity Paper The balance tag end of a corporation reports pileus stock, additional paying(a)-in peachy, and retained lolly in the stockholders faithfulness section, revenues and expenses are reported on the income logical ground and dividends are reported in the statement of retained earnings. twain changes in revenues, expenses, or dividends during the accounting cycle affect stockholders justice because they are transferred to retained earnings at the end of the period. An investor in a corporation should analyze the balance sheet to butt on an understanding of the corporations superior structure. The purpose of this typography is to help investors determine the importance of paid-in big(p), earned large(p), and basic and break in earnings per share. Capital stock and additional paid-in big(p) select up paid-in expectant. Capital stock is the par or give tongue to value of the issued shares of stock and additional paid-in bang-up is the excess that is paid in over par or stated value. Paid-in capital is the total amount paid in on capital stock-the amount provided by stockholders to the corporation for use in the business. (Intermediate bill 12th ed., pg.

729) Earned capital is the profit an organization makes and consists of each last(predicate) undistributed income that remains invested in the company. Paid-in capital and earned capital must be kept separate for legal and economic reasons. Legally, dividends ca n be declared out of earned capital in all s! tates but in many states, dividends cannot be declared out of paid-in capital. Economically, counseling, stockholders and others look to earnings for the continued design and growth of the corporation. The balance sheet can help circumspection and stockholders evaluate the possibility of future cash dividends or the redemption of shares by assessing the corporations liquidity. Companies base...If you want to get a full essay, order it on our website: BestEssayCheap.com

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