Chapter 18 Capital Stock（课件）-《实用会计英语》同步教学（大连理工大学出版社）

CAPITAL STOCK CHAPTER 18 18-1 2 2 Stock A unit of ownership in a corporation is called a share of stock. Stock certificate Stockowners Investment Corporation 18-1 Stock Shareholders’ meeting Board of directors Elect Appoint Corporate officers and managers They are responsible for the operations of the business. 18-1 Stock Corporation Issue Common Stock Preferred Stock 18-1 Common Stock If only one stock is issued by the corporation, it is called common stock. The common stockholders have the right to vote on certain general management matters. They have access to the financial report about corporation performance. A portion of dividends is issued by the company to its common stockholders. 18-1 Common Stock Common Stock The common stock means that all other creditors and priority claims are settled ahead of those of the common stockholders. 18-1 Preferred Stock Preferred stock may be issued so that the company can obtain money from investors who have different investment goals. At maturity date, the company will purchase back the preferred stocks. 18-1 Differences Common stock Preferred stock The right to vote on important issues Have No Declare dividend After preferred stock The first to be paid Liquidation After preferred stock After the creditor Callable feature Cannot be recalled Can be made callable The Difference between Common Stock and Preferred Stock The company can force the preferred shareholders to cash out of their position in exchange for a “call price” that is often set at a certain percentage of par value. 18-1 Issuance of Par Value Stock Stocks are required to have a designated par value. Par value “Legal capital” of the company represent When par value stock is issued, the appropriate capital stock account is credited for the par value regardless of whether the proceeds are more or less than the par value. 18-1 Issuance of Par Value Stock Suppose that Anderson Corporation