F7M2 Flashcards
Nonemployee stock issued below par
represent contingent liability to stockholder
debit APIC
Stock subscriptions
contractual agreement to sell a specified number of shares at an agreedupon price
Sale of subscription
just a moment
JE when paid
stock subscription paid JE
DR: Subscriptions Receivable
CR: CS
CR: APIC
type of account subscirption receiveable
contra-equity
Stock rights
memo only; JE once exercised
gives opportunity to buy additional shares
Distributions for Shareholders
statement of equity
NOT INCOME STATEMENT
date of declaration
BOD approves
Date of record (Dividends)
no entry
Date of Payment for cash dividend
financing outflow
how are in-kind and property dividends recorded
at FV
Script dividend
form of note payable
no cash outflow
Liquidating dividend
dividend exceeds RE
reduce APIC until 0 and then reduce RE
Stock dividends
no cash outflow and no dividend income
reduction of RE
Treatment of stock dividend less than 25%
reduce RE by FMV
