Chapter 12

Corporations: Organization, Capital Stock Transactions, and Dividends

Accounting, 21st Edition
Warren Reeve Fess
Copyright 2004 South-Western, a division of Thomson Learning. All rights reserved. Task Force Image Gallery clip art included in this electronic presentation is used with the permission of NVTech Inc.

PowerPoint Presentation by Douglas Cloud

Professor Emeritus of Accounting Pepperdine University

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Objectives
1. Describe the nature of the corporate After studying this form of organization. chapter, you should 2. List the two main sources of be able to: stockholders equity. 3. List the major sources of paid-in capital, including the various classes of stock. 4. Journalize the entries for issuing stock. 5. Journalize the entries for treasury stock transactions.

Objectives
6. State the effect of stock splits on corporate financial statements. 7. Journalize the entries for cash dividends and stock dividends. 8. Describe and illustrate the reporting of stockholders equity. 9. Compute and interpret the dividend yield on common stock.

Organizational Structure of a Corporation

Stockholders (owners of corporation stock) Board of Directors (elected by stockholders) Officers (selected by board of directors) Employees

Forming a Corporation
First step is to file an application of incorporation with the state.

Because state laws differ, corporations often organize in states with more favorable laws.
More than half of the largest companies are incorporated in Delaware. State grants a charter or articles of incorporation which formally create the corporation.

Management and board of directors prepare bylaws which are operation rules and procedures.

Forming a Corporation
On January 5, the firm paid the organization costs of $8,500. This amount includes legal fees, taxes and licenses, promotion costs, etc.
Jan. 5 Organization Expense Cash Paid cost of organizing the corporation. 8 500 00 8 500 00

Stockholders Equity
Liabilities Assets Stockholders Stockholders Equity Equity

Stockholders Equity = Assets Liabilities Represents the stockholders share of the total assets.

Stockholders Equity
There Assets are two sources Stockholders Stockholders of stockholders Equity Equity equity.
Liabilities

Stockholders Equity
Liabilities Assets Stockholders Stockholders Equity Equity
1
$xxxxx
xxxx $xxxxx Stockholder investments

Stockholders Equity: Paid-in capital:

Common stock
Retained earnings Total

Stockholders Equity
Liabilities Assets Stockholders Stockholders Equity Equity

Stockholders Equity: Paid-in capital:

Common stock
Retained earnings Total

$xxxxx
xxxx $xxxxx

2
Reinvested earnings

Sources of Paid-In Capital

Authorized Issued Outstanding

Number of Shares

Sources of Paid-In Capital

Major Rights that Accompany Ownership of a Share of Stock
1. The right to vote in matters concerning the corporation. 2. The right to share in distribution of earnings. 3. The right to share in assets on liquidation.

Classes of Stockholders
The two primary classes of paid-in capital are common stock and preferred stock. The primary attractiveness of preferred stocks is that they are preferred over common as to dividends. Preferred Stockholders

Money available for dividends

Common Stockholders

Classes of Stockholders
Common Stockthe basic ownership of stock with rights to vote in election of directors, share in distribution of earnings, and purchase additional shares. Preferred StockA class of stock with preferential rights over common stock in payment of dividends and company liquidation.

Nonparticipating Preferred Stock

A nonparticipating preferred stock is limited to a certain amount. Assume 1,000 shares of $4 nonparticipating preferred stock and 4,000 shares of common stock and the following:
2005 2006 2007

Net income Amount retained Amount distributed

$20,000 $55,000 $62,000 10,000 20,000 40,000 $10,000 $35,000 $22,000

Nonparticipating Preferred Stock

Amount distributed $10,000 $35,000 $22,000 Preferred dividend (1,000 shares) 4,000 4,000 4,000 Common dividend (4,000 shares) $6,000 $31,000 $18,000 Dividends per share: Preferred $ 4.00 $ 4.00 $ 4.00 Common $ 1.50 $ 7.75 $ 4.50

Cumulative Preferred Stock

So, preferred dividends are two years in arrears. Assume 1,000 shares of $4 cumulative preferred stock and 4,000 shares of common stock. No dividends were paid in 2005 and 2006.

Cumulative Preferred Stock

On March 7, 2007, the board of directors declares dividends of $22,000.

Cumulative Preferred Stock

Preferred Stock Dividends Dividends Paid in 2007
Total dividends paid, $22,000

$4,000
2005
(In arrears)

$4,000
$4,000 $4,000 $4,000 2007
(Current dividend)

$10,000

2006
(In arrears)

$4,000 Preferred Stock Common Stock

Other Sources of Paid-in Capital

On April 20 the city of Moraine donated land to Merrick Corporation as an incentive to relocate its headquarters to Moraine. The land was valued at $500,000.
Apr. 20 Land Donated Capital Recorded land donated by the 500 000 00 500 000 00

city of Moraine.

ISSUING STOCK Penerbitan /Penjualan Saham

Dijual tunai Dijual dengan pembayaran bertahap Ditukar dengan Aktiva non cash Ditukar dengan perusahaan ( dalam penggabungan usaha

Penerbitan Saham

PT ABC Saham

Pada tanggal 1 April 2002 PT. A menjual 4.000 lembar saham nominal $1/lb dengan harga $45,000

PT A Saham $1 Kas bertambah Saham yang beredar bertambah Agio Saham bertambah

$45,000

$ 45,000 $ 4,000 $ 41,000

Tgl April 1 Cash

Account
Common Stock
Paid In Capital - C/S

Debit
$ 45,000

Kredit
$ 4,000

$ 41,000

Pada tanggal 1 April 2002 PT. A menjual 4.000 lembar saham nominal $1/lb dengan harga $4,000

PT A Saham $1 Kas bertambah Saham yang beredar bertambah

$4,000

$ 4,000 $ 4,000

Tgl April 1 Cash

Account
Common Stock

Debit
$ 4,000

Kredit
$ 4,000

Pada tanggal 1 April 2002 PT. A menjual 4.000 lembar saham nominal $1/lb dengan harga $3,600

PT A Saham $1 Kas bertambah Memberi discount Saham yang beredar bertambah

$3,600

$ 3,600 $ 400 $ 4,000

Tgl April 1 Cash

Account
PIC-C/S or R/E
Common Stock

Debit
$ 3,600 $ 400

Kredit

$ 4,000

Pada tanggal 1 April 2002 PT. A menjual 4.000 lembar saham tanpa nominal dengan harga $45,000

PT A Saham

$45,000

Kas bertambah Saham yang beredar bertambah

$ 45,000 $ ?

Tgl April 1 Cash

Account
Common Stock

Debit
$ 45,000

Kredit
$ 45,000

Pada tanggal 1 November 2002 PT. A menerima order / pesanan 5.000 lembar saham nominal $1 per lembar dengan harga $12.5/lembar. Saat itu diterima down Payment 50 %.

Tgl
2002

Account

Debit
$62,500

Kredit

Nov.1 Stock Subcription Rec

Common Stock Subscribed PIC

Cash 31,250 Stock SubcriptionReceivable

5,000 57,500
31,250

Pada tanggal 1 Desember 2002 PT. A menerima sisa harga untuk 2.500 lembar. Selanjutnya diserahkan 2,500 lembar saham ke pemesan.

Tgl
2002 Des. 1

Account Cash Stock Subscription Rec. Common Stock Subscribed Common stock

Debit 15,625

Kredit

15,625 2,500 2,500

Bagaimana jika ada yang gagal membayar

1. Seluruh uang yang diterima dikembalikan 2. Seluruh uang yang diterima tidak dikembalikan, melainkan dianggap kedaluarsa 3. Uang yang diterima dikembalikan setelah dikurangi dengan jumlah tertentu 4. Pemesan saham diberikan saham sesuai dengan yang telah dibayar.

200 lembar saham biasa nominal $0.5/lembar ditukar dengan tanah. Saham perusahaan diperdagangkan di bursa dengan harga $50
Saham (200 lb, $0.5/lb, Hg pasar $50/lb) Perusahaan

Tanah

Tgl 2002

Account

Debit

Kredit

Land Common Stock PIC-C/S

10,000
100

9,900

200 lembar saham biasa nominal $0.5/lembar ditukar dengan tanah. Saham perusahaan tidak diperdagangkan di bursa sementara itu harga pasar tanah lebih dapat dipercaya yaitu $12,000 Saham (200 lb, $.5/lb) Perusahaan

Tanah =$12,000

Tgl 2002

Account Land Common Stock PIC-C/S

Debit 12,000

Kredit

100 11,900

100 lembar saham biasa nominal $.5/lembar diserahkan ke salah satu karyawan sebagai pembayaran gaji. Saham perusahaan diperdagangkan di bursa dengan harga $50/lembar.

Tgl 2002

Account

Debit

Kredit

Salaries Expense Common Stock PIC-C/S

5,000
50

4,950

Issuing Stock at No-Par

Some states require that the entire proceeds from the sale of no-par stock be treated as legal capital.

Issuing Stock at No-Par

Also, no-par stock may be assigned a stated value per share. The stated value is recorded similar to a par value.

Issuing Stock with a Stated Value

On March 30, issued 1,000 shares of no-par common stock at $40; stated value, $25.
Mar. 30 Cash 40 000 00

Common Stock
Paid-in Capital in Excess of Stated Value

25 000 00
15 000 00

Issued 1,000 shares of no-par common stock at $36; stated value, $25.

Treasury Stock
Saham Perusahaan yang pernah diterbitkan dan sekarang dibeli kembali oleh perusaaan
PT. ABC PT ABC Saham Pemegang saham

PT ABC Saham

PT. ABC PT ABC Saham

Pemegang saham

PT ABC Saham

PT ABC PT ABC PT Saham ABC Saham Saham

PT ABC Saham

AKM-2 Ekuitas

Metode Pencatatan

METODE COST

METODE NILAI NOMINAL

Margono

III-39

METODE COST
1. Pada saat dibeli, treasury stock dicatat sebesar cost 2. Pada saat treasury stock dijual bandingkan antara harga jual dengan costnya

A. Harga jual = cost

B. Harga jual > cost Selisihnya dicatat sebagai Agio/Paid In Capital Selisihnya mengurangi Agio dan laba ditahan

B. Harga jual < cost

PT. ABC menerbitkan 10,000 lembar saham nominal $1 dengan harga jual $15 per lembar

Kas bertambah 10.000x $15 = $150,000 Modal saham bertambah 10.000x$1 = $10.000 Timbul agio 10.000x ($15-$1) = $140,000

Account
Cash Common Stock Paid In Capital in Exess of Par

Debit
$150,000

Kredit
$ 10,000 $140,000

Agio/Premium= Paid In Capital in Exess of Par

PT. ABC membeli kembali 1,000 lembar saham dengan harga beli $40 per lembar Treasury stock bertambah 1.000x $40 = $40,000 Kas berkurang = $40.000

Account
Treasury Stock Kas Treasury Stok 40,000

Debit
$ 40,000

Kredit
$ 40,000

Cash 40,000

PT. ABC menjual 200 lembar Treasury Stock dengan harga jual $50 per lembar

Account Cash Treasury Stock Paid In capital From T/S

Cost

Debit 10,000

Kredit 8,000 2,000

PT. ABC menjual 500 lembar Treasury Stock dengan harga $34 /lb Kas bertambah = $17.000 Treasury stock berkurang 500 lembar $ 40 =$20,000 Menerima uang dari pemegang saham $3,000 lebih kecil

Account
Kas Paid In Capital- T/S Retained earning Treasury stock Treasury Stok 40,000 $ 8,000 PIC-T/S $ 2,000

Debit
$ 17,000 $ 2,000 $ 1,000

Kredit

$ 20,000 Cash $ 10,000 40,000

PT. ABC menjual 500 lembar Treasury Stock dengan harga jual $34 per lembar

Account Cash Paid In capital From T. Stock Retained Earning Treasury Stock

Debit 17,000 2,000 1,000

Kredit

20,000

PT. ABC membatalkan 300 lembar Treasury Stock

Account Common Stock Paid In capital in Excess of Par Retained Earning Treasury Stock

Debit 300 4,200 7,500

Kredit

12,000

PT. ABC membatalkan 300 lembar Treasury Stock

Account Common Stock

Debit 300

Kredit

PIC in Excess of Par-C/S

Treasury Stock

11,700
12,000

Cost

Stock Splits
A corporation sometimes reduces the par or stated value of their common stock and issues a proportionate number of additional shares. This is called a stock split.

Stock Splits
BEFORE STOCK SPLIT
4 shares, $100 par

AFTER 5-1 STOCK SPLIT

20 shares, $20 par

$400 total par value

$400 total par value

Stock Splits
A stock split does not change the balance of any corporation accounts. However, it can make the stock more attractive to investors by reducing the price of a share,

Accounting for Dividends

Dividends are distributions of retained earnings to stockholders.

Dividends may be paid in cash, stock, or property.

Dividends, even on cumulative preferred stock, are never required, but once declared become a legal liability of the corporation.

Accounting for Cash Dividends

Corporations generally declare and pay cash dividends on shares outstanding when three conditions exist: 1. Sufficient retained earnings 2. Sufficient cash 3. Formal action by the board of directors
Retained Earnings 50,000

Accounting for Cash Dividends

There are three important dates relating the dividends.

Accounting for Cash Dividends

First is the date of declaration. Assume that on December 1, Hiber Corporation declares a $42,500 dividend.

Accounting for Cash Dividends

Date of Declaration
Dec. 1 Cash Dividends
Cash Dividend Payable Declared cash dividend.

42 500 00
42 500 00

Accounting for Cash Dividends

The second important date is the date of record. For Hiber Corporation this would be December 11.

Accounting for Cash Dividends

The third important date is the date of payment. On January 2, Hiber issues dividend checks.

Accounting for Cash Dividends

Date of Payment
Jan. 2 Cash Dividends Payable
Cash Paid cash dividends.

42 500 00
42 500 00

Accounting for Stock Dividends

A distribution of dividends to stockholders in the form of the firms own shares is called a stock dividend.

Accounting for Stock Dividends

Stock dividends transfer pro rata shares of stock to stockholders. Assume Hendrix Corporation issues a 5% stock dividend on common stock, $20 par, 2,000,000 shares issued.diketahui harga pasar saat ini adalah $31

Accounting for Stock Dividends

Hendrix Corporation, December 15 (before dividend) Common Stock, $20 par $40,000,000 Paid-in Capital in Excess of Par--Common Stock 9,000,000 Retained Earnings 26,600,000
Dec. 15 Stock Dividends
Stock Dividends Distributable Paid-in Capital in Excess of

3,100 000 00
2,000000 00

ParCommon Stock
Declared stock dividend.

1,100000 00

Accounting for Stock Dividends

On January 10, Hendix Corporation issues the stock. This action increases the number of shares outstanding by 100,000.
Jan. 10 Stock Dividends Distributable Common Stock Issued stocks for the stock dividend. 2,000 000 00 2,000000 00

Accounting for Stock Dividends

Hendrix Corporation, December 15 (before dividend) Common Stock, $20 par $40,000,000 Paid-in Capital in Excess of Par--Common Stock 9,000,000 Retained Earnings 26,600,000 $75,600,000 Hendrix Corporation, January 10 (after dividend) Common Stock, $20 par Paid-in Capital in Excess of Par--Common Stock Retained Earnings $42,000,000 10,100,000 23,500,000 $75,600,000

Financial Analysis and Interpretation

Use: To Yield indicate the rate of return to common Dividend stockholders in terms of dividends
Dividends per share of common Market price per share of common 2004 $ 0.80 $20.50 2003 $ 0.60 $13.50

Dividends per Share of Common Stock Dividend Yield Market Price per Share of Common Stock $.60 Dividend Yield, 2006 $13.50 = 4.4% $.80 Dividend Yield, 2007 = 3.9% $20.50

There are two ways to report stockholders equity in the balance sheet. In Slide 58, each class of stock is listed first, followed by its related paid-in capital accounts.

Stockholders Equity
Paid-in capital: Preferred 10% stock, $50 par, cumulative (2,000 shares authorized and issued) $100,000 Excess of issue price over par(PIC-P/S) 10,000 $ 110,000 Common stock, $20 par (50,000 shares authorized, 45,000 issued) $900,000 Excess of issue price over par(PIC C/S) 190,000 1,090,000 From sale of treasury stock 2,000 Total paid-in capital $1,202,000 Retained earnings 350,000 Total $1,552,000 Deduct treasury stock (600 shares at cost) 27,000 Total stockholders equity $1,525,000

61

Slide 60 shows the second method. Note that the stock accounts are listed first. The other paid-in capital accounts are listed as a single item described as Additional paidin capital.

Stockholders Equity
Contributed capital: #Preferred 10% stock, cumulative $50 par (2,000 shares authorized and issued) #Common stock, $20 par (50,000 shares authorized, 45,000 issued) #Additional paid-in capital - PIC P/S - PIC C/S - PIC T/S Total contributed capital Retained earnings Total Deduct treasury stock (600 shares at cost) Total stockholders equity

$100,000

900,000 10,000 190,000 2,000

202,000 $1,202,000 350,000 $1,552,000 27,000 $1,525,000

Chapter 12

The End

Stock Right, Warrant and Option

Right

Hak yang diberikan ke para pemegang saham untuk membeli saham baru
Surat berharga yang dijual oleh perusahaan /yang melekat pada surat berharga lain yang memberi hak untuk membeli saham Opsi untuk membeli saham perusahaan dengan harga tertentu yang diberikan ke officer atau karyawan

Warrant

Opsi

Stock Right

Tak perlu ada jurnal

Stock Warrant

Detachable Warrant

Non detachable Warrant

Warrant yang dapat dipisahkan dengan surat berharga lainnya

Warrant yang tak dapat dipisahkan dengan surat berharga lainnya

Warrant dicatat tersendiri

Warrant tak dicatat tersendiri

DetachableStock Warrant
PT. B menjual 1.000 saham prefent nominal $50/lembar dengan harga $58/lembar. Pemegang saham Preferrent diberikan warrant untuk membeli 1,000 lembar saham biasa nominal $2/ lembar dengan harga $25/lembar. Segera setelah itu harga pasar Saham Preferrent tanpa warrant $57/lembar, sementara itu warrant diperjualbelikan dengan harga $3/lembar.

Warrant S.P $50 Harg a Jual $58

$58

Harga saham
Dialokasikan Harga warrant

Perbandingan Harga pasar saham dan warrant

Alokasi Harga Jual dan Jurnal

Warrant= ( 3:60) x $58 = $2,900
Nominal =$ 50,000

Saham = ( 57:60) x $58 = $55,100

Agio = $ 5,100

Account Cash Preferreed Stock PIC in Excess of Par -PS Stock Warrant

Debit 58,000

Kredit 50,000 5,100 2,900

Jika warrant diexercise=1.000 lembar $25, par $2/lembar

Account
Cash Common Stock Warrant Common Stock PIC In Exess of Par

Debit
25,000 2,900

Kredit

2,000 25,900

Jika warrant tak diexercise

Account
Stock Warrant PIC From Expired Warrant

Debit
2,900

Kredit
2,900

Stock Option
Opsi untuk membeli saham perusahaan dengan harga tertentu yang diberikan ke officer atau karyawan Jumlah opsiTetap Stock Option

Jumlah opsi dapat berubah

Cara pencatatan
Metode nilai intrinsik Metode Fair Value

Harga Opsi = selisih antara harga pasar saham dengan harga excercise

Harga Opsi = ditentukan dengan formula tertentu

Fixed Option

( Metode nilai intrinsik)

Selisih antara Harga pasar saham saat pemberian opsi dengan harga beli saham (exercise)

PT. A pada tanggal 1 Januari 2000 memberikan hak opsi untuk membeli 10.000 lembar saham PT. A dengan harga $50 per lembar ke pegawai yang tetap bekerja tiga tahun mulai 1 Januari 2000 s.d. 31 Desember 2002. Harga Pasar saham pada waktu itu $50.00 per lembar.

Harga opsi = 10.000 x (50-50 = 0

Tidak ada jurnal

Metode Fair Value

PT. A pada tanggal 1 Januari 2000 memberikan hak opsi untuk memberli 10.000 lembar saham PT. A dengan harga $50 per lembar ke pegawai yang tetap bekerja tiga tahun mulai 1 Januari 2000 s.d. 31 Desember 2002. Opsi ini memiliki fair value $10 per lembar
Opsi

Perusahaan

Karyawan Jasa

Nilai opsi/Jasa = 10.000 x $10 = $ 100,000

Nilai opsi = Menunjukkan besarnya nilai jasa karyawan selama 3 tahun karena mereka harus kerja 3 tahun untuk mendapatkan opsi ini

Nilai opsi/Jasa = 10.000 x $10 = $ 100,000

1. Timbul Expense selama 3 tahun 2. Timbulan setoran calon pemodal dalam bentuk jasa

Account

Debit

Kredit

Compensation Expense
Paid In Capital From Stock Option

33,333
3,333

Opsi yang berubah

Lihat slide stock based compensation

Konversi Saham Preferent ke Saham Biasa

Harga jual Prefered Stock Dulu dianggap harga pasar dari Saham biasa yang sekarang diserahkan

Saham Biasa
PT. A
Saham Prefrerent

Pemegang Saham PT. A

Konversi Saham Preferent ke Saham Biasa

Harga jual Prefered Stock Dulu dianggap harga pasar dari Saham biasa yang sekarang diserahkan

Harga jual SP > Nominal SB

Harga jual SP < Nominal SB

Selisihnya dianggap agio

Selisihnya dibebankan Ke Retained earning

Convertible Preferred Stock

Account

Debit

Kredit