Principles of Financial Accounting · free preview
Owners' Equity versus Retained Earnings
Stockholders equity divides into contributed capital, what owners paid in, and retained earnings, what the business has earned and kept, and the two pieces answer different questions about where the corporation's value came from.
1. Two sources of equity
Two sources of equity
2. Reading a typical equity section
Reading a typical equity section
3. Legal capital and the dividend constraint
Legal capital and the dividend constraint
4. Disclosure and analysis
Disclosure and analysis
5. Two sources named
Which two components make up stockholders equity?
6. Retained earnings meaning
What does the retained earnings balance represent?
7. Treasury stock in the section
How does treasury stock appear in the stockholders equity section?
8. Dividend legality
Which condition commonly restricts a corporation's ability to declare dividends?
9. Contributed capital total
Common stock is 100,000 dollars and additional paid-in capital is 1,400,000 dollars. Compute total contributed capital in dollars, number only.
10. Total equity computation
Contributed capital totals 1,500,000 dollars, retained earnings are 2,300,000 dollars, and treasury stock cost 150,000 dollars. Compute total stockholders equity in dollars, number only.
Practice this interactively
Free account · instant grading · spaced review that schedules itself.
Start this course for free