In: Accounting
Accounting 2 - Chapter 11: Chappell discussion - Discuss how stockholder's equity is reported and analyzed in the financial statements?
Stockholder’s equity are represented as the corporation’s owners invested money in the company. The purpose of reporting the Stockholder’s equity in the financial Statement is that it let the reader know that what amount of the assets is being financed by the owner’s fund and what by the borrowing funds.
The framework of the Shareholder’s Equity Statement is generally contains:
Common Stock – Authorised, issued & outstanding quantity @ par value |
Total par Value |
|
Preferred Stock - Authorised, issued & outstanding quantity @ par value |
-do- |
|
Additional Paid in Capital – Common Stock |
Additional paid in |
|
Additional Paid in Capital – Preferred Stock |
-do- |
|
Total capital contribution |
Total of above |
|
Add: Retained Earnings |
Amount |
|
Less: Treasury Stock |
Treasury stock amount |
|
Net Retained Earnings |
+ RE amount |
|
Total Shareholder’s Equity |
Total Shareholders equity amount |
The Shareholder’s equity position at a point of time can be analysed and compared with the other period or other company on the following ratios :
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