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CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 11-2 Stock Subscriptions and the Balance Sheet.

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Presentation on theme: "CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 11-2 Stock Subscriptions and the Balance Sheet."— Presentation transcript:

1 CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 11-2 Stock Subscriptions and the Balance Sheet

2 CENTURY 21 ACCOUNTING © Thomson/South-Western Issuing par value stock Par value is face value printed on stock certificate. Debit Cash, credit Preferred or Common Stock Excess of Par Value—Debit Cash, Credit Capital Stock for par value and credit Paid in Capital in Excess of Par for cash received minus par value. (Stockholder’s equity account and separate accounts are kept for each type of stock.) 2 LESSON 11-2

3 CENTURY 21 ACCOUNTING © Thomson/South-Western Stock Subscription Selling of stock on an installment basis. Subscribers promise to purchase certain number of shares at an agreed price at a later date. Represents cash to be received in the future: When paid in full, stock is issued: Debit Common Stock Subscribed, Credit Capital Stock account for par or stated value. 3 LESSON 11-2

4 CENTURY 21 ACCOUNTING © Thomson/South-Western 4 LESSON 11-2 1 2 3 4 56 1.Write the date. 3.Record memorandum number. 4.Enter debit amount. 5.Enter the account credited. 6.Enter credit amount. 2.Enter the account debited. JOURNALIZING A STOCK SUBSCRIPTION page 324  Represents cash to be received in the future:  Debit Subscriptions Receivable, credit total par or stated value to Common Stock Subscribed (not paid for or issued).

5 CENTURY 21 ACCOUNTING © Thomson/South-Western 5 LESSON 11-2 JOURNALIZING CASH RECEIVED FOR A STOCK SUBSCRIPTION page 325  Recording receipt of installments: Debit Cash, Credit Subscriptions Receivable

6 CENTURY 21 ACCOUNTING © Thomson/South-Western 6 LESSON 11-2 JOURNALIZING ISSUANCE OF STOCK PREVIOUSLY SUBSCRIBED page 325  When paid in full, stock is issued:  Debit Common Stock Subscribed, Credit Capital Stock account for par or stated value.

7 CENTURY 21 ACCOUNTING © Thomson/South-Western 7 LESSON 11-2 Treasury Stock page 325  Stock issued and re-acquired by corporation (does not affect number of shares issued, but reduces number outstanding).  Recording buy back  Debit Treasury Stock at price paid for stock, credit Cash  Cash payment Journal

8 CENTURY 21 ACCOUNTING © Thomson/South-Western 8 LESSON 11-2 Treasury Stock page 325  Sale of Treasury Stock - Cash receipts journal  May be sold at, below, or above cost  More than cost—Debit Cash, credit Treasury stock for cost to re-acquire, credit Paid in Capital from Sale of Treasury Stock (excess above cost)  Less than Cost—Debit Cash for cash received, credit Treasury Stock for the reacquisition cost, debit Paid in Capital from Sale of Treasury Stock (difference between cash received and reacquisition cost).  At cost—Debit Cash, Credit Treasury Stock

9 CENTURY 21 ACCOUNTING © Thomson/South-Western 9 LESSON 11-2 1.List intangible assets as the last category of assets. 2.List sources of paid-in capital. BALANCE SHEET OF A NEWLY FORMED CORPORATION page 326 1 2

10 CENTURY 21 ACCOUNTING © Thomson/South-Western 10 LESSON 11-2 TERMS REVIEW subscribing for capital stock intangible assets page 327


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