Actpaco quiz6 yahoo

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<ul><li> 1. HELLO CORPORATION </li> <li> 2. RETAINED EARNINGS Retained Earnings represent the undistributed earnings of the corporation arising from its operations. The balance is divided into two parts: (1)Appropriated Retained Earnings set for particular purpose (2)Unappropriated Retained Earnings available for distribution as dividends to the shareholders. </li> <li> 3. APPROPRIATED RETAINED EARNINGS Appropriations to Report to Legal Restrictions * Mandated by law that retained earnings be appropriated or set aside. * e.g., Appropriation for Treasury Shares Appropriations to Report to Contractual Restrictions * appropriation as agreed with creditors and shareholders * e.g., Appropriation for Bond Redemption and Appropriation for Share Capital Redemption </li> <li> 4. APPROPRIATED RETAINED EARNINGS Appropriations to Report to Discretionary Action by Board of Directors * appropriation for actual use or planned use in the future of resources as authorized by board of directors * e.g., Appropriation for Plant Expansion and Appropriation for General Contingencies </li> <li> 5. APPROPRIATED RETAINED EARNINGS Appropriations of Retained Earnings Retained Earnings Retained Earnings Appropriated for Cancellation of Appropriation Retained Earnings Appropriated for Retained Earnings </li> <li> 6. RETAINED EARNINGS - FREE Retained Earnings, Beginning Add: Net income Cancellation of RE appropriation Deduct: Net loss Declaration of dividends RE appropriation Retained Earnings, End </li> <li> 7. DIVIDENDS Dividends are distribution to shareholders of corporate earnings in proportion of shares held by them. (1)Dividends paid out of accumulated earnings of the corporation (2)Dividends paid as return of shareholders invested capital (liquidating dividend) Only outstanding shares are eligible to receive dividends. </li> <li> 8. DIVIDENDS DATES DATE OF DECLARATION date when board of directors approve to distribute dividends. DATE OF RECORD date when company determines the shareholders entitled to receive declared dividends. Share capital are selling dividends-on prior to this date and are selling ex-dividends the day following this date. DATE OF PAYMENT date when dividends declared are paid or distributed to the shareholders. </li> <li> 9. TYPES OF DIVIDENDS 1.) Cash Dividends 2.) Scrip Dividends 3.) Property Dividends 4.) Stock Dividends a. Small Share Capital Dividend b. Large Share Capital Dividend </li> <li> 10. CASH DIVIDENDS Cash dividends are dividends distributable in the form of cash DATE OF DECLARATION Retained Earnings Cash Dividends Payable DATE OF RECORD No entry DATE OF PAYMENT Cash Dividends Payable Cash Cash Dividends Payable is part of current liability. </li> <li> 11. CASH DIVIDENDS (1) PESO DIVIDENDS (A cash dividend expressed in peso amount) Cash dividends payable = Peso dividend * number of outstanding shares (1) PERCENTAGE DIVIDENDS (A cash dividend expressed in percentage) Cash dividends payable = dividend % * total par or stated value of outstanding share capital The amount of cash dividends declared should not exceed the amount of cash reported on the statement of financial position or cash needed for current operations. </li> <li> 12. TYPES OF DIVIDENDS 1.) Cash Dividends 2.) Scrip Dividends 3.) Property Dividends 4.) Stock Dividends a. Small Share Capital Dividend b. Large Share Capital Dividend </li> <li> 13. SCRIP DIVIDENDS Scrip dividends are deferred cash dividends declared when the corporation has sufficient retained earnings balance but not sufficient funds at that time for a cash dividends. Scrip dividends consist of a written promise to pay certain amounts at some future date. </li> <li> 14. PROPERTY DIVIDENDS Property dividends are dividends distributable in the form of noncash assets recorded for the fair value of the property to be distributed. Property distributed takes the form of assets that can be easily divided or allocated among shareholders such as stocks of other companies owned by the corporation. </li> <li> 15. STOCK DIVIDENDS A share capital dividend is a distribution to shareholders in the form of corporations own capital stock. The transaction is a transfer of capital from retained earnings to contributed capital. The transaction does not affect total assets and total shareholders equity. </li> <li> 16. STOCK DIVIDENDS Kinds of Stock Dividends: (1)Small share capital dividend represents less than 20% of outstanding shares. (2)Large share capital dividend represents 20% or more of outstanding shares. </li> <li> 17. SMALL SHARE CAPITAL DIVIDEND DATE OF DECLARATION Retained Earnings [Ordinary/Preferred] Share Capital Dividends Distributable Paid-In Capital from Share Capital Dividends DATE OF PAYMENT [Ordinary/Preferred] Share Capital Dividends Distributable [Ordinary/Preferred] Share Capital [Ordinary/Preferred] Share Capital Dividends Distributable = recorded at par or stated value of the shares Paid-In Capital from Share Capital Dividends = excess of the fair market value of the share over its par or stated value </li> <li> 18. LARGE SHARE CAPITAL DIVIDEND DATE OF DECLARATION Retained Earnings [Ordinary/Preferred] Share Capital Dividends Distributable DATE OF PAYMENT [Ordinary/Preferred] Share Capital Dividends Distributable [Ordinary/Preferred] Share Capital [Ordinary/Preferred] Share Capital Dividends Distributable = recorded at par or stated value of the shares </li> <li> 19. STOCK DIVIDENDS Kinds of Stock Dividends: (1)Small share capital dividend recorded at fair value of the stocks. (2)Large share capital dividend recorded at par or stated value of the stocks. [Ordinary/Preferred] Share Capital Dividends Distributable = as addition to Capital of Contributed Capital in Stockholders Equity. Paid-In Capital from Share Capital Dividends = as part of reserves in Stockholders Equity. </li> <li> 20. DIVIDENDS ON PREFERENCE SHARES When dividends are paid, the dividend requirements on preference shares must be paid before any payment can be made to ordinary shareholders. </li> <li> 21. DIVIDENDS ON PREFERENCE SHARES Types of Preference Shares (1) Cumulative (2) Non-cumulative (3) Participating (4) Nonparticipating </li> <li> 22. DIVIDENDS ON PREFERENCE SHARES CUMULATIVE Preference shares entitled to years unpaid dividends or dividends in arrears before the payment of current years dividends. NON-CUMULATIVE Preference shares are not entitled to payment of dividends in arrears but to current years dividends only. </li> <li> 23. DIVIDENDS ON PREFERENCE SHARES PARTICIPATING Preference shares are entitled to additional dividends after the payment of regular dividends to both the preference and ordinary shareholders. NON-PARTICIPATING Preference shares are not entitled to additional dividends after the payment of regular dividends to both the preference and ordinary shareholders. </li> <li> 24. PARTICIPATING PREFERENCE SHARE FULLY PARTICIPATING Excess dividend is allocated proportionately to the two classes of share capital based on their total par value PARTICIPATING UP TO A CERTAIN PERCENTAGE Dividend on preference share is the lower of the maximum allowed participation and the amount based on full participation amounts. Maximum allowed participation = % x Total value of Preference Shares </li> <li> 25. SHARES ENTITLED TO DIVIDENDS Issued shares Subscribed shares Delinquent shares Treasury shares Not All Yes Yes No Treasury shares are issued shares reacquired by the company. All outstanding shares are issued shares but not all issued shares are outstanding. </li> <li> 26. SHARES ENTITLED TO DIVIDENDS Issued shares Subscribed shares Delinquent shares Treasury shares Not All Yes Yes No Only outstanding shares are eligible for dividend distribution. Outstanding Shares = Issued Shares Treasury Shares </li> <li> 27. SHARES ENTITLED TO DIVIDENDS Issued shares Subscribed shares Delinquent shares Treasury shares Not All Yes Yes No Only outstanding shares are eligible for dividend distribution. Outstanding Shares = Issued Shares Treasury Shares </li> <li> 28. SHARES ENTITLED TO DIVIDENDS NORMAL COMPUTATION: Outstanding Shares = Issued Shares Treasury Shares OUTSTANDING SHARES (FOR DIVIDENDS): Outstanding Shares = Issued Shares Treasury Shares + Subscribed Shares + Delinquent Shares + Share Dividends Distributable </li> <li> 29. STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY The statement of changes in shareholders equity reports transactions or items that cause changes in shareholders equity account balances, including: * profit or loss for the period * other comprehensive income * capital share transactions * retained earnings appropriation </li> <li> 30. BOOK VALUE PER SHARE Book value per share is the amount that would be paid on each share assuming the company is liquidated. The amount available to shareholders is assumed to be exactly the amount reported as total shareholders equity. For computation purposes, subscribed shares should be added to the outstanding shares. </li> <li> 31. BOOK VALUE PER SHARE Book Value per Share = Total Shareholders Equity Number of Shares Outstanding </li> <li> 32. EARNINGS PER SHARE Earnings per share is the amount earned during a given period on each ordinary share outstanding. </li> <li> 33. EARNINGS PER SHARE EARNINGS PER SHARE = Profit Attributable to Ordinary Share Outstanding Common Share Profit or loss per income statement Less: Dividends on preference share PROFIT ATTRIBUTABLE TO ORDINARY SHARE DIVIDENDS ON PREFERENCE SHARE = Total par value * dividend rate If preference shares are cumulative, deduct dividends whether declared or not. If preference share are non-cumulative, deduct dividends only when declared. </li> <li> 34. INCORPORATING A PARTNERSHIP A sole proprietorship or a partnership may decide to incorporate to enjoy the advantages of being a corporation. The following shall be recorded in the corporation books: (1) authorized share capital (2) issuance of share capital for the net assets transferred by the partnership (3) issuance of share capital to other incorporators. </li> <li> 35. INCORPORATING A PARTNERSHIP Entries on the partnership books are: (1)Revaluation of net assets (2)Closing of Capital Adjustment Account to partners capital accounts (using agreed P/L ratio) (3)Receipt of share capital from net corporation (4)Distribution of share capital to partners (5)Distribution of cash to partners, if any. </li> <li> 36. INCORPORATING A PARTNERSHIP REVALUATION OF NET ASSETS Merchandise Inventory Capital Adjustment Account Equipment Accumulated Depreciation Capital Adjustment Account No accumulated depreciation will be recorded upon formation of the corporation. CLOSE CAPITAL ADJUSTMENT ACCOUNT Capital Adjustment Account Partner A, Capital Partner B, Capital </li> <li> 37. INCORPORATING A PARTNERSHIP RECORD RECEIPT OF SHARE CAPITAL [Corporation Name] [Ordinary/Preferred] Share Capital Liabilities assumed Assets contributed DISTRIBUTION OF SHARE CAPITAL TO PARTNERS Partner A, Capital Partner B, Capital [Corporation Name] [Ordinary/Preferred] Share Capital DISTRIBUTION OF CASH TO PARTNERS Partner A, Capital Partner B, Capital Cash </li> <li> 38. INCORPORATING A PARTNERSHIP NEW CORPORATIONS BOOKS (1)Record Authorized share Capital (2)Recognize the issuance of share capital Assets Liabilities Ordinary Share Capital (1)Record issuance of share capital to other incorporator Cash Ordinary Share Capital </li> </ul>