Chapter 12Corporations: Organization, Capital Stock Transactions, and DividendsAccounting, 21st EditionWarren Reeve FessPowerPoint Presentation by Douglas Cloud Professor Emeritus of Accounting Pepperdine University

Some of the action has been automated, so click the mouse when you see this lightning bolt in the lower right-hand corner of the screen. You can point and click anywhere on the screen.

1.Describe the nature of the corporate form of organization.2.List the two main sources of stockholders equity.3.List the major sources of paid-in capital, including the various classes of stock.4.Journalize the entries for issuing stock.5.Journalize the entries for treasury stock transactions.ObjectivesAfter studying this chapter, you should be able to:

6.State the effect of stock splits on corporate financial statements.7.Journalize the entries for cash dividends and stock dividends.8.Describe and illustrate the reporting of stockholders equity.9.Compute and interpret the dividend yield on common stock.

Objectives

Organizational Structure of a CorporationStockholders(owners of corporation stock)

Forming a CorporationFirst step is to file an application of incorporation with the state.Because state laws differ, corporations often organize in states with more favorable laws.More than half of the largest companies are incorporated in Delaware.State grants a charter or articles of incorporation which formally create the corporation.Management and board of directors prepare bylaws which are operation rules and procedures.

Forming a CorporationOn January 5, the firm paid the organization costs of $8,500. This amount includes legal fees, taxes and licenses, promotion costs, etc. Jan.5Organization Expense8 500 00Paid cost of organizing the corporation.Cash 8 500 00

Stockholders Equity = Assets LiabilitiesRepresents the stockholders share of the total assets. Stockholders EquityAssetsLiabilitiesStockholdersEquityStockholders Equity

Assets Stockholders EquityLiabilitiesStockholdersEquityStockholders Equity

Stockholders Equity:Paid-in capital:Common stock$xxxxxRetained earnings xxxxTotal$xxxxx1Stockholderinvestments Stockholders EquityAssetsLiabilitiesStockholdersEquityStockholders Equity

Stockholders Equity:Paid-in capital:Common stock$xxxxxRetained earnings xxxxTotal$xxxxxReinvested earnings Stockholders EquityAssetsLiabilitiesStockholdersEquityStockholders Equity

AuthorizedIssuedOutstandingNumber of SharesSources of Paid-In Capital

Major Rights that Accompany Ownership of a Share of Stock1.The right to vote in matters concerning the corporation.2.The right to share in distribution of earnings.3.The right to share in assets on liquidation.Sources of Paid-In Capital

Classes of StockholdersThe two primary classes of paid-in capital are common stock and preferred stock. The primary attractiveness of preferred stocks is that they are preferred over common as to dividends.

Classes of StockholdersCommon Stockthe basic ownership of stock with rights to vote in election of directors, share in distribution of earnings, and purchase additional shares.Preferred StockA class of stock with preferential rights over common stock in payment of dividends and company liquidation.

Nonparticipating Preferred StockA nonparticipating preferred stock is limited to a certain amount. Assume 1,000 shares of $4 nonparticipating preferred stock and 4,000 shares of common stock and the following:Net income$20,000$55,000$62,000Amount retained 10,000 20,000 40,000Amount distributed$10,000$35,000$22,000 2005 2006 2007

Nonparticipating Preferred StockDividends per share: Preferred$ 4.00$ 4.00$ 4.00 Common$ 1.50$ 7.75$ 4.50Amount distributed$10,000$35,000$22,000Preferred dividend (1,000 shares)4,0004,0004,000Common dividend (4,000 shares)$6,000$31,000$18,000

Assume 1,000 shares of $4 cumulative preferred stock and 4,000 shares of common stock. No dividends were paid in 2005 and 2006.Cumulative Preferred StockSo, preferred dividends are two years in arrears.

On March 7, 2007, the board of directors declares dividends of $22,000.Cumulative Preferred Stock

$4,000$4,000$4,000Cumulative Preferred StockPreferred Stock DividendsDividends Paid in 2007Total dividends paid, $22,000Preferred StockCommon Stock

Other Sources of Paid-in CapitalOn April 20 the city of Moraine donated land to Merrick Corporation as an incentive to relocate its headquarters to Moraine. The land was valued at $500,000.Apr.20Land500 000 00Recorded land donated by the city of Moraine.Donated Capital500 000 00

ISSUING STOCKPenerbitan /Penjualan SahamDijual tunaiDijual dengan pembayaran bertahapDitukar dengan Aktiva non cashDitukar dengan perusahaan ( dalam penggabungan usaha

Penerbitan SahamPT ABC Saham

Pada tanggal 1 April 2002 PT. A menjual 4.000 lembar saham nominal $1/lb dengan harga $45,000PT A Saham$1$45,000Kas bertambah $ 45,000 Saham yang beredar bertambah $ 4,000 Agio Saham bertambah $ 41,000 Cash $ 45,000 Common Stock $ 4,000 Paid In Capital - C/S $ 41,000

TglAccountDebitKreditApril 1

Pada tanggal 1 April 2002 PT. A menjual 4.000 lembar saham nominal $1/lb dengan harga $4,000PT A Saham$1$4,000Kas bertambah $ 4,000 Saham yang beredar bertambah $ 4,000 Cash $ 4,000 Common Stock $ 4,000

TglAccountDebitKreditApril 1

Pada tanggal 1 April 2002 PT. A menjual 4.000 lembar saham nominal $1/lb dengan harga $3,600PT A Saham$1$3,600Kas bertambah $ 3,600 Memberi discount $ 400 Cash $ 3,600 PIC-C/S or R/E $ 400 Saham yang beredar bertambah $ 4,000 Common Stock $ 4,000

TglAccountDebitKreditApril 1

Pada tanggal 1 April 2002 PT. A menjual 4.000 lembar saham tanpa nominal dengan harga $45,000PT A Saham

$45,000Kas bertambah $ 45,000 Cash $ 45,000 Saham yang beredar bertambah $ ? Common Stock $ 45,000

TglAccountDebitKreditApril 1

Pada tanggal 1 November 2002 PT. A menerima order / pesanan 5.000 lembar saham nominal $1 per lembar dengan harga $12.5/lembar. Saat itu diterima down Payment 50 %.

TglAccountDebitKredit2002Nov.1Stock Subcription Rec$62,500 Common Stock Subscribed5,000 PIC57,500Cash31,250 Stock SubcriptionReceivable31,250

Pada tanggal 1 Desember 2002 PT. A menerima sisa harga untuk 2.500 lembar. Selanjutnya diserahkan 2,500 lembar saham ke pemesan.

TglAccountDebitKredit2002Des. 1Cash15,625 Stock Subscription Rec.15,625Common Stock Subscribed2,500 Common stock2,500

Bagaimana jika ada yang gagal membayarSeluruh uang yang diterima dikembalikanSeluruh uang yang diterima tidak dikembalikan, melainkan dianggap kedaluarsaUang yang diterima dikembalikan setelah dikurangi dengan jumlah tertentuPemesan saham diberikan saham sesuai dengan yang telah dibayar.

200 lembar saham biasa nominal $0.5/lembar ditukar dengan tanah. Saham perusahaan diperdagangkan di bursa dengan harga $50Perusa-haanSaham (200 lb, $0.5/lb, Hg pasar $50/lb)Tanah

TglAccountDebitKredit2002Land10,000 Common Stock100 PIC-C/S9,900

200 lembar saham biasa nominal $0.5/lembar ditukar dengan tanah. Saham perusahaan tidak diperdagangkan di bursa sementara itu harga pasar tanah lebih dapat dipercaya yaitu $12,000Perusa-haanSaham (200 lb, $.5/lb)Tanah =$12,000

TglAccountDebitKredit2002Land12,000 Common Stock100 PIC-C/S11,900

100 lembar saham biasa nominal $.5/lembar diserahkan ke salah satu karyawan sebagai pembayaran gaji. Saham perusahaan diperdagangkan di bursa dengan harga $50/lembar.

TglAccountDebitKredit2002Salaries Expense5,000 Common Stock50 PIC-C/S4,950

Issuing Stock at No-ParSome states require that the entire proceeds from the sale of no-par stock be treated as legal capital.

Issuing Stock at No-ParAlso, no-par stock may be assigned a stated value per share. The stated value is recorded similar to a par value.

Issuing Stock with a Stated ValueOn March 30, issued 1,000 shares of no-par common stock at $40; stated value, $25.Mar.30Cash 40 000 00Issued 1,000 shares of no-par common stock at $36; stated value, $25.Common Stock25 000 00Paid-in Capital in Excess of Stated Value15 000 00

Treasury StockSaham Perusahaan yang pernah diterbitkan dan sekarang dibeli kembali oleh perusaaanPT ABC SahamPT. ABCPemegang sahamPT ABC Saham

PT ABC SahamPT. ABCPemegang sahamPT ABC SahamPT ABCSahamPT ABCSahamPT ABCSahamPT ABCSaham

III-*Metode PencatatanAKM-2 EkuitasMargonoMETODE COSTMETODE NILAI NOMINAL

METODE COST1. Pada saat dibeli, treasury stock dicatat sebesar cost2. Pada saat treasury stock dijual bandingkan antara harga jual dengan costnyaA. Harga jual = costB. Harga jual > costB. Harga jual < costSelisihnya dicatat sebagaiAgio/Paid In CapitalSelisihnya mengurangi Agio dan laba ditahan

PT. ABC menerbitkan 10,000 lembar saham nominal $1 dengan harga jual $15 per lembarAgio/Premium= Paid In Capital in Exess of ParKas bertambah 10.000x $15 = $150,000Modal saham bertambah 10.000x$1 = $10.000 Timbul agio 10.000x ($15-$1) = $140,000 Cash $150,000Common Stock $ 10,000 Paid In Capital in Exess of Par $140,000

Treasury stock bertambah 1.000x $40 = $40,000Kas berkurang = $40.000 Treasury Stock $ 40,000 Kas $ 40,000 PT. ABC membeli kembali 1,000 lembar saham dengan harga beli $40 per lembarTreasury Stok40,000Cash40,000

PT. ABC menjual 200 lembar Treasury Stock dengan harga jual $50 per lembarCost

Treasury stock berkurang 500 lembar $ 40 =$20,000Kas bertambah = $17.000 Kas $ 17,000Paid In Capital- T/S $ 2,000PT. ABC menjual 500 lembar Treasury Stock dengan harga $34 /lbTreasury Stok40,000Cash40,000Menerima uang dari pemegang saham $3,000 lebih kecil Treasury stock $ 20,000 $ 10,000 $ 8,000PIC-T/S $ 2,000Retained earning $ 1,000

PT. ABC menjual 500 lembar Treasury Stock dengan harga jual $34 per lembar

PT. ABC membatalkan 300 lembar Treasury Stock

PT. ABC membatalkan 300 lembar Treasury Stock

Cost

Stock SplitsA corporation sometimes reduces the par or stated value of their common stock and issues a proportionate number of additional shares. This is called a stock split.

Stock SplitsBEFORE STOCK SPLIT4 shares, $100 par$400 total par value

Stock SplitsA stock split does not change the balance of any corporation accounts. However, it can make the stock more attractive to investors by reducing the price of a share,

Accounting for DividendsDividends are distributions of retained earnings to stockholders.Dividends may be paid in cash, stock, or property.Dividends, even on cumulative preferred stock, are never required, but once declared become a legal liability of the corporation.

Corporations generally declare and pay cash dividends on shares outstanding when three conditions exist:1. Sufficient retained earningsAccounting for Cash Dividends2. Sufficient cash3. Formal action by the board of directors

Accounting for Cash DividendsThere are three important dates relating the dividends.

Accounting for Cash DividendsFirst is the date of declaration. Assume that on December 1, Hiber Corporation declares a $42,500 dividend.

Dec.1Cash Dividends 42 500 00Declared cash dividend. Cash Dividend Payable42 500 00Date of DeclarationAccounting for Cash Dividends

The second important date is the date of record. For Hiber Corporation this would be December 11. Accounting for Cash Dividends

The third important date is the date of payment. On January 2, Hiber issues dividend checks.Accounting for Cash Dividends

Accounting for Cash DividendsJan.2Cash Dividends Payable 42 500 00Paid cash dividends. Cash 42 500 00Date of Payment

Accounting for Stock DividendsA distribution of dividends to stockholders in the form of the firms own shares is called a stock dividend.

Accounting for Stock DividendsStock dividends transfer pro rata shares of stock to stockholders. Assume Hendrix Corporation issues a 5% stock dividend on common stock, $20 par, 2,000,000 shares issued.diketahui harga pasar saat ini adalah $31

Accounting for Stock DividendsDec.15Stock Dividends 3,100 000 00Declared stock dividend.Hendrix Corporation, December 15 (before dividend)Common Stock, $20 par$40,000,000Paid-in Capital in Excess of Par--Common Stock9,000,000Retained Earnings26,600,000 Stock Dividends Distributable2,000000 00 Paid-in Capital in Excess of ParCommon Stock1,100000 00

Accounting for Stock DividendsJan. 10Stock Dividends Distributable 2,000 000 00Issued stocks for the stock dividend. Common Stock2,000000 00On January 10, Hendix Corporation issues the stock. This action increases the number of shares outstanding by 100,000.

Accounting for Stock Dividends

Financial Analysis and InterpretationDividend Yield20042003Dividends per share of common$ 0.80$ 0.60Market price per share of common$20.50$13.50 Dividends per Share of Common StockMarket Price per Share of Common StockDividend YieldUse:To indicate the rate of return to common stockholders in terms of dividends

There are two ways to report stockholders equity in the balance sheet. In Slide 58, each class of stock is listed first, followed by its related paid-in capital accounts.

Paid-in capital:Preferred 10% stock, $50 par, cumulative (2,000 shares authorized and issued) $100,000Excess of issue price over par(PIC-P/S) 10,000$ 110,000Common stock, $20 par(50,000 shares authorized, 45,000 issued)$900,000Excess of issue price over par(PIC C/S) 190,0001,090,000From sale of treasury stock 2,000 Total paid-in capital$1,202,000Retained earnings 350,000Total$1,552,000Deduct treasury stock (600 shares at cost) 27,000Total stockholders equity$1,525,000

Stockholders Equity61

Slide 60 shows the second method. Note that the stock accounts are listed first. The other paid-in capital accounts are listed as a single item described as Additional paid-in capital.

Contributed capital:#Preferred 10% stock, cumulative $50 par (2,000 shares authorized and issued) $100,000#Common stock, $20 par(50,000 shares authorized, 45,000 issued)900,000#Additional paid-in capital- PIC P/S 10,000- PIC C/S190,000- PIC T/S2,000 202,000 Total contributed capital$1,202,000Retained earnings 350,000Total$1,552,000Deduct treasury stock (600 shares at cost) 27,000Total stockholders equity$1,525,000Stockholders Equity

The EndChapter 12

Stock Right, Warrant and OptionHak yang diberikan ke para pemegang saham untuk membeli saham baruSurat berharga yang dijual oleh perusahaan /yang melekat pada surat berharga lain yang memberi hak untuk membeli sahamOpsi untuk membeli saham perusahaan dengan harga tertentu yang diberikan ke officer atau karyawanRightWarrantOpsi

Stock RightTak perlu ada jurnal

Stock WarrantNon detachable WarrantDetachable Warrant Warrant yang dapat dipisahkan dengan surat berharga lainnya Warrant yang tak dapat dipisahkan dengan surat berharga lainnya Warrant dicatat tersendiri Warrant tak dicatat tersendiri

DetachableStock WarrantPT. B menjual 1.000 saham prefent nominal $50/lembar dengan harga $58/lembar. Pemegang saham Preferrent diberikan warrant untuk membeli 1,000 lembar saham biasa nominal $2/ lembar dengan harga $25/lembar. Segera setelah itu harga pasar Saham Preferrent tanpa warrant $57/lembar, sementara itu warrant diperjualbelikan dengan harga $3/lembar.Harga sahamHarga Jual $58 Harga warrantDialokasikanPerbandingan Harga pasar saham dan warrantWarrantS.P$50$58

Alokasi Harga Jual dan JurnalSaham = ( 57:60) x $58 = $55,100Warrant= ( 3:60) x $58 = $2,900Nominal =$ 50,000Agio = $ 5,100

AccountDebitKreditCash58,000 Preferreed Stock PIC in Excess of Par -PS Stock Warrant50,0005,1002,900

Jika warrant diexercise=1.000 lembar $25, par $2/lembar

AccountDebitKreditCash25,000Common Stock Warrant Common Stock2,9002,000 PIC In Exess of Par25,900

Jika warrant tak diexercise

AccountDebitKreditStock Warrant2,900 PIC From Expired Warrant2,900

Stock OptionOpsi untuk membeli saham perusahaan dengan harga tertentu yang diberikan ke officer atau karyawanStock OptionJumlah opsiTetapJumlah opsi dapat berubah

Cara pencatatanMetode nilai intrinsikMetode Fair ValueHarga Opsi = selisih antara harga pasar saham dengan harga excerciseHarga Opsi = ditentukan dengan formula tertentu

Fixed Option( Metode nilai intrinsik)Selisih antara Harga pasar saham saat pemberian opsi dengan harga beli saham (exercise)

PT. A pada tanggal 1 Januari 2000 memberikan hak opsi untuk membeli 10.000 lembar saham PT. A dengan harga $50 per lembar ke pegawai yang tetap bekerja tiga tahun mulai 1 Januari 2000 s.d. 31 Desember 2002. Harga Pasar saham pada waktu itu $50.00 per lembar.Harga opsi = 10.000 x (50-50 = 0Tidak ada jurnal

Metode Fair Value

PT. A pada tanggal 1 Januari 2000 memberikan hak opsi untuk memberli 10.000 lembar saham PT. A dengan harga $50 per lembar ke pegawai yang tetap bekerja tiga tahun mulai 1 Januari 2000 s.d. 31 Desember 2002. Opsi ini memiliki fair value $10 per lembarNilai opsi/Jasa = 10.000 x $10 = $ 100,000Nilai opsi = Menunjukkan besarnya nilai jasa karyawan selama 3 tahun karena mereka harus kerja 3 tahun untuk mendapatkan opsi iniPerusahaanKaryawanOpsiJasa

Nilai opsi/Jasa = 10.000 x $10 = $ 100,000Timbul Expense selama 3 tahunTimbulan setoran calon pemodal dalam bentuk jasa

AccountDebitKreditCompensation Expense33,333 Paid In Capital From Stock Option3,333

Opsi yang berubahLihat slide stock based compensation

Konversi Saham Preferent ke Saham BiasaHarga jual Prefered Stock Dulu dianggap harga pasar dariSaham biasa yang sekarang diserahkanPT. APemegangSaham PT. ASaham BiasaSaham Prefrerent

Konversi Saham Preferent ke Saham BiasaHarga jual Prefered Stock Dulu dianggap harga pasar dariSaham biasa yang sekarang diserahkanHarga jual SP > Nominal SBHarga jual SP < Nominal SBSelisihnya dianggap agioSelisihnya dibebankan Ke Retained earning

Convertible Preferred Stock

AccountDebitKredit