ACCT 2121 CH 9 Liabilities and SE & 8.4 Intangible Assets

stockholder rights

1. vote in election of BoD

2. share the corporate earnings through receipt of dividends if declared

3. keep same % ownership when new shares of stock are issued (preemptive right)

4. share in assets upon liquidation (bankruptcy)

4 reasons why companies buy back T/S

1. to reissue shares to officers under bonus and stock comp plans

2. increase trading of company’s stock in securities market

3. have additional shares available for use in acquiring other companies

4. increase EPS

discount on bonds payable

contra-liability

premium on bonds payable

contra-liability you ADD

face value is

ALWAYS fixed

amortization is

straight line only

amortization…

reduced the discount/premium amount to 0

earning per share

net income - preferred stock dividends (if any) / average # of shares of C/S outstanding

**higher is better

definite life intangibles

• patents, copyrights

• EXPIRE; AMORTIZED

indefinite life intangibles

• trademarks, tradenames, goodwill

• NOT amortized

goodwill

cash purchase price - FMV of net assets acquired

contractual

“stated”

market

“effective”