基础会计(英文版)(第二版)Chapter13 Corporation Earnings per Share and Dividends.ppt

Chapter 13 Chapter 13 Corporation: Earnings per Share and Dividends Earnings Per Share (EPS) Price-earnings ratio (p/e ratio) = Market price per share of common stock Annual earnings per share Examples: P243-244 Other Stockholders Equity Transactions Cash Dividends Three requirements for the payment of cash dividends: retained earnings an adequate cash position dividend action by the board of directors Four significant dates involved in the distribution of a dividend Date of declaration Date of record Ex-dividend date Date of payment Stock Dividends Stock Dividends: a distribution of additional shares of stock to a companys stockholders in proportion to their present holdings. Stock dividends VS. cash dividends Recording Stock Dividends Involving four dates (same as cash dividends) : date of declaration; date of record; ex-dividend date; date of payment. Small stock dividends (less than 25% of the previously outstanding shares)→present market value Large stock dividends (more than 25% of the previously outstanding shares) →par value Statement of Retained Earnings and Prior Period Adjustment Statement of Retained Earnings and Prior Period Adjustment Treasury Stock Treasury stock: shares of a corporations own capital stock that have been issued and later reacquired by the issuing company. held indefinitely or issued again at any time not entitled to receive dividends, to vote, or to share in assets upon dissolution of the company not regarded as outstanding shares Recording Purchases of Treasury Stock Treasury Stock account is debited for the cost of the shares purchased, not their par value. The purchase of treasury stock should be regarded as a reduction of stockholders equity, not as the acquisition of an asset. E.g. Reissuance of Treasury Stock Treasury Stock account is credited for the cost of the shares reissued. Paid-in Capital from Treasury Stock Transactions is debited or credited for any difference between cost and