ACCT 200 Outline of Last Lecture I Stock terms II Treasury stock III 3 terms for stocks IV Debt to Equity Ratio V Leverage Outline of Current Lecture I Some Equations II EP 2 III 8 17 IV 8 18 V 8 22 Current Lecture I II Some Equations a Common Stock Earnings per share net income preferred dividends paid outstanding common shares i Earnings per share is the maximum dividend a share of common stock could receive if the corporation retained none of its earnings ii Issued stocks Treasury stocks outstanding stocks b Dividend Yield dividends per share of common stock market price per share of common stock c Dividend per share total common stock dividend shares of common stock outstanding d Price Earnings Ratio Market price per share of common stock EPS of common stock EP 2 The business originally made a 15 000 purchase on account then converted it to a formal note payable notes payable have interest accounts payable don t a Increase note payable 15000 Decrease account payable 15000 These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute III IV V b 15000 x 07 x 15 360 43 75 interest expense 43 75 interest payable 43 75 c 15000 x 07 x 31 360 90 42 interest expense 90 42 interest payable 90 42 d 15000 x 07 x 14 360 40 83 interest expense 40 83 interest payable 134 17 April May notes payable 15000 cash 15175 Payment of principle is a financing cash flow on statement of cash flows Payment of interest is an operating less than 1 yr cash flow on SOCF 8 17 a Jan 29 increase cash 1725000 increase common stock 750000 increase APIC 975000 financing on SOCF 1725000 May 31 increase cash 600000 increase preferred stock 400000 increase APIC 200000 financing on SOCF 600000 b total paid in capital total cash received from cash issuance 1725000 600000 2325000 8 18 increase land 280000 increase common stock 200000 increase APIC 80000 NOTHING here goes on SOCF because we issued stock in exchange for land 8 22 a Feb 6 declaration Increase dividends 55350 Increase dividends payable 55350 b March 9 date of record no accounting done here c April 8 distribution date Decrease cash 55350 Decrease dividends payable 55350 Financing activity on SOCF 55350
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