Homework SourseAccounting 2 Chapter 11 Chappell discussion Discuss how st
Accounting 2 - Chapter 11: Chappell discussion - Discuss how stockholder\'s equity is reported and analyzed in the financial statements?
Solution
Stockholder’s equity are represented as the corporation’s owners invested money in the company. The purpose of reporting the Stockholder’s equity in the financial Statement is that it let the reader know that what amount of the assets is being financed by the owner’s fund and what by the borrowing funds.
The framework of the Shareholder’s Equity Statement is generally contains:
Common Stock – Authorised, issued & outstanding quantity @ par value
Total par Value
Preferred Stock - Authorised, issued & outstanding quantity @ par value
-do-
Additional Paid in Capital – Common Stock
Additional paid in
Additional Paid in Capital – Preferred Stock
-do-
Total capital contribution
Total of above
Add: Retained Earnings
Amount
Less: Treasury Stock
Treasury stock amount
Net Retained Earnings
+ RE amount
Total Shareholder’s Equity
Total Shareholders equity amount
The Shareholder’s equity position at a point of time can be analysed and compared with the other period or other company on the following ratios :
=======================================================
| Common Stock – Authorised, issued & outstanding quantity @ par value | Total par Value | |
| Preferred Stock - Authorised, issued & outstanding quantity @ par value | -do- | |
| Additional Paid in Capital – Common Stock | Additional paid in | |
| Additional Paid in Capital – Preferred Stock | -do- | |
| Total capital contribution | Total of above | |
| Add: Retained Earnings | Amount | |
| Less: Treasury Stock | Treasury stock amount | |
| Net Retained Earnings | + RE amount | |
| Total Shareholder’s Equity | Total Shareholders equity amount |
