Professional Documents
Culture Documents
I. Background Information
A. Types of Corporations
1. Public Sector Owned by governmental unit
Example: FDIC
2. Private Sector
a. Nonstock - Nonprofit entities
No stock issued
Examples: Church, Charity
b. Stock -
or if insufficient PIC
Cash
XX
Common Stock
XX
Discount on CS XX
III.
B. No Par Stock
1. Issue
Cash
XX
(shares x sales price)
Common Stock
XX (shares x sales price)
XX
(cash collected)
XX
XX
(cash collected)
XX
IV.B.
4. If some individuals default
(cannot complete contract)
Accounting can vary depending on state law.
If company is allowed to retain partial payment
made by the defaulted subscriber the entry is:
Recording strategy Remove existing balances
from the Balance Sheet and record
the net of the existing balances
(this will be a cr. ) as PIC
XX
XX
(shares x par)
(prior PIC booked)
XX (unpaid A/R)
XX (prior cash
collected)
10
V. D. (continued)
Cash
48
Sec. A.
PIC - A
2
14
(2 A-shares x $1 par)
(plug)
$16
Sec. B
PIC - B
10
22
(5 B-shares x $2 par)
(plug)
$32
12
48
Sec. A
PIC- A
2
18
(2 A-shares x $1 par)
(plug)
$20
Sec. B
PIC - B
10
18
(5 B-shares x $2 par)
(plug)
$28
13
XX
YY
Total = ??
14
15
XX
XX
(sales price)
XX (cost of TS)
XX (gain booked as PIC)
16
VIII.C.
3. Sell TS for less than originally paid
Cash
TS
XX
PIC-TS
XX
(sales price)
XX (cost of TS)
(loss booked as PIC reduction
but do not reduce
PIC-TS below 0)
XX
PIC-TS
XX
(reduce PIC-TS to 0)
R.E.
XX
XX
(sales price)
(cost of TS)
17
CS
XX
PIC-CS XX
TS
XX
(shares x par)
(shares x average PIC-CS)
(cost of TS)
PIC-TS
RE
XX
XX
19
IX. C.
3. If paid less for TS than average issue price of
original stock - book gain as additional
PIC - Retirement of TS
CS
XX
PIC-CS XX
TS
PIC-Retirement
of TS
XX
XX
(shares x par)
(shares x avg PIC-CS)
(cost of TS)
(gain on retirement
booked as PIC)
20
(shares x par)
(shares x average PIC-CS)
(cost of stock)
PIC-SR XX
RE
XX
21
IX. D.
3. If paid less for stock than average issue price of
original stock - book gain as additional
PIC - Share Repurchase (PIC-SR)
CS
XX
PIC-CS XX
Cash
PIC-SR
XX
XX
(shares x par)
(shares x avg PIC-CS)
(cost of stock)
(gain on retirement
booked as PIC arising
from Share Repurchase)
22
XX
(outstanding shares x
dividend rate)
XX
23
XX
XX
Retained Earnings
XX
Property Dividends Payable XX
24
X.B.3. Entries
Date of Record:
No entry in general ledger
Date of Distribution:
Property Dividends Payable XX
XX
Property Account1
25
27
Date of Record:
No entry in general ledger
Date of Distribution:
Common Stk. Div. Distributable XX
Common Stock
XX
28
XX
(shares x par)
XX (shares x par)
Date of Record:
No entry in general ledger
Date of Distribution:
Common Stk. Div. Distributable XX
Common Stock
XX
29
30
31
32