Corporations: Paid-in Capital, Retained Earnings, Dividends, and Treasury Stock

Learning objectives

After studying this chapter, you should be able to:

Identify the different sources of paid-in capital and describe how to present them on a balance sheet.
Account for a cash dividend, a stock dividend, a stock split, and a retained earnings appropriation.
Account for the acquisition and reissuance of treasury stock.
Describe the proper accounting treatment of discontinued operations, extraordinary items, and changes in accounting principle.
Define prior period adjustments and show their proper presentation in the financial statements.
Analyze and use the financial results – earnings per share and price-earnings ratio.