chap 11 equations and journal entrys

basic earnings per share

net income - preferred dividend/ weighted average common shares outstanding

price earning ratio (pt)

market value (price) per share / market value per share

(journal entry) small stock dividends

1) find

• number of shares being issued

• market value per share

• par value per share

2) compute total market value

• shares being issued x market price

• (this becomes amount debited to stock dividend)

3) compute common stock amount

• total market value - par value amount

• (this becomes paid in capital in excess par)

4) record

• debit → stock dividend (the computed market value)

• credit → common stock dividend distribution

• credit → paid in capital in excess of par (the computed common stock)

(journal entry) large stock dividends

1) find

• shares issued

• par value

2) compute

• shares issued x par value

3) record entry

• debit → stocks dividends

• credit → common stock dividend distributable

(journal entry) distribution date

1) look at the amount in

• common stock dividend distributable

2) remove its by

• debiting it (debit→ common stock dividend distributable)

3) record it

• debit→ common stock dividend distributable

• credit→ common stock

(journal entry) declaration date

1) find

• dividend per shar

• number of shares outstanding

2) multiply (this finds total dividend amount)

• dividend per share x shares outstanding

3) record

• debit→ cash dividends

• credit→ dividend payable

(journal entry) issuing par value for cash

1) find

• number of shares sold

• selling price per share

• par value

2) compute cash recived

• shares x selling price

3) compute common stock amount

• shares x par value

4) record

• debit→ cash

• credit→ common stock

5) if selling price = par value

• no extra paid in capital

(journal entry) issuing par value stock @ cash premium

1) find

• shares issued

• selling price

• par value

2) compute cash

• shares x selling price

3) compute common stock

• shares x par value

4) find excess

• cash - par value

5) record

• debit → cash

• credit→ common stock

• credit → paid in capital excess of par

(journal entry)issuing par value stock for non cash land

1) find

• value of the land

2) compute common stock

• shares issued x par value

3) subtract ( compute what will be pic)

• land value - common stock

4) record

• debit→ land

• credit→ common stock

• credit→ paid in capital in excess of par

(journal entry) issuing no-par value for cash

1) find cash recived

• shares x selling price

2) record

• debit→ cash

• credit→ common stock (for full amout)

(journal entry) stated value stock

1) computed cash

• shares x selling price

2) subtract

• cash - stated value

3) record

• credit→ common stock

• credit→ pic in excess stated value

(journal entry) date of payment

1) find

• dividend payable balance

2) record

• debit→ dividend payable

• credit→ cash

(journal entry) date of record

1) find

• identify shareholder receiving dividends’s

2) DO NOT RECORD journal entry

• no debit

• no credit

(journal entry) treasury stock purchase

1) find

• shares repurchased

• cost per share

2) multiply

• shares x cost

3) record

• debit→ treasury

• credit→ cash

(journal entry) treasury stock purchase

1) find

-og treasury stock

2) record

-debit→ cash amount recived

-credit → trasury stock