July 8 Cash (6,200,000 × $10) Common Stock
62,000,000 62,000,000
To issue common stock
Common Stock Above Par
IHOP’s common stock has a par value of $0.01 per share. The company issues 6,200,000 shares of common stock at $10 per share. July 23 Cash (6,200,000 × $10) 62,000,000 Common Stock (6,200,000 × $0.01) Paid-in Capital in Excess of Par – Common (6,200,000 × $9.99) To issue common stock
2004
2003
$100,779 145,384 630,997 1,667
$100,779 144,247 539,776 (2,210)
(195,196)
(138,656)
Common Stock at Par
Suppose IHOP’s / common stock carried a par value of $10 per share. The company issues 6,200,000 shares.
IHOP Corp. Purchase of Treasury Stock
During 2004, IHOP paid $5,170 to purchase 288 shares of its common stock as treasury stock.
November 12, 2000 Treasury Stock Cash Purchased treasury stock
Treasurer (Finance Officer)
Stockholders’ Equity
Consists of both
Contributed capital (Paid-in capital) Retained Earnings
Classes of stock
Common or preferred Stock
62,000 61,938,000
Preferred Stock
Preferred stock is another means for raising capital Preferred stockholders have no voting rights
Preferred stockholders are compensated （补偿） in much the same way as creditors Typically, they are paid as a % of par value each year – much like interest This is paid BEFORE common stockholders are paid dividends
2004 –
2003 –
$ 431 2,135 40,206 851
$ 440 1,954 37,576 (509)
Pier 1 Imports, Inc. Shareholders’ Equity
(In thousands except per share amounts)
Common stock, $1.00 par value, 500,000,000 shares authorized, 100,799,000 issued Paid-in capital Retained earnings Cumulative other comp. income (loss) Less – 12,473,0000 and 10,045,000 common shares in treasury, at cost, respectively
Preferred Stock
Convertible preferred stock
Can be converted to common at a predetermined amount Callable preferred stock（可赎回优先股） Can be redeemed at the option of the issuing company Cumulative preferred stock If the predetermined dividend payment is not made, it can be accumulated and paid at a later time – before any dividends can be paid to common stockholders.
Why Issue a Stock Dividend?
To continue dividends but conserve cash
Reduce the per-share market price Type types:
Small (25% or less) Large (above 25%)
ACCT-101 Class 24
Chapter 9
Stockholder’s Equity
Corporate（法人） Authority （权利）Structure
Stockholders
Board of Directors（董事会） Chairperson of the Board（董事长）
President (Chief Executive Officer总裁、首席执行官)
Sale of Treasury Stock
Assume that on July 22, 2005, the shares of IHOP treasury stock are sold for $5,300.
Cash 5,300 Treasury Stock Paid-In Capital from Treasury Stock Transactions Sold treasury stock
Dividend Dates
Three relevant dates for dividends:
Declaration date A liability is recorded for cash dividends declared Date of record Dividends are paid to stockholders on the record at this date Payment date
5,170
130
Retained Earnings, Dividends, and Splits
A dividend is a corporation’s return to its stockholders of some of the benefits of earnings. A stock split（股票分割） is an increase in the number of authorized, issued, and outstanding shares A reverse stock split（反向分割 ） is a decrease in the number of authorized, issued, and outstanding shares
Treasury Stock Transactions
Treasury stock（库存股份） are shares that a company has issued and later reacquired Reasons for purchasing its own stock
Increase EPS（Earnings Per Share ） Use for purchasing other companies Avoidance of a takeover（收购）
5,170 5,170
IHOP Corp. Aቤተ መጻሕፍቲ ባይዱter Purchase of Treasury Stock
Stockholder’s Equity at December 31, 2004 (with treasury stock purchased – $000) Common Stock $ 203 Paid-in capital in excess of par 69,655 Retained earnings 193,632 Less: Treasury stock (288 shares at cost) – 5,170 Total equity $258,320
Corporate Authority Structure
President (Chief Executive Officer)
VP
Sales
（Vice President）
VP Manufacturing
CFO
VP Personnel （人事）
Secretary
Controller (Accounting Officer)
Par or no par stock
Wal-mart Shareholders’ Equity
(Amounts in millions)
Preferred stock ($0.10 par value, 100 shares authorized; none issued) Common stock ($0.10 par value, 11,000 shares authorized, 4,311 and 4,395 issued and outstanding in 2004 and 2003, respectively) Capital in excess of par value(股本溢价) Retained earnings Other accumulated comp. income