...External Reporting 4/30/2015 Stockholders’ Equity Investors typically prefer corporations as investment vehicles. Corporations provide liability shielding and make it relatively easy to buy and sell shares. For this reason, business owners who intend to raise capital most often choose the corporate structure to do so. Owners in a corporation are called stockholders. Corporations exist to provide value to their stockholders. This value is reflected in stockholders' equity. For our paper, we decided to choose stockholders equity. This topic is one of the more important things we have learned so far. Understanding stockholders equity is essential to becoming a good investor. Stockholders' equity, also called shareholders' equity, is the owners' equity in the corporation. It appears on a corporation's balance sheet and reflects the owners' interest in the corporation. You are a stockholder whether you hold or own one share of stock in a corporation or 100 percent of the outstanding shares and are the sole owner. The shares you own, whether actual physical shares or shares documented on paper, reflect your ownership in the corporation. Owning a share of stock then will declare you as a valid shareholder within that company. On the balance sheet, assets less liabilities equal stockholders' equity. Therefore, stockholders' equity is also referred to as net worth. Stockholders' equity records how much you and other co-owners or investors have contributed to the corporation...
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...Owners' Equity Paper Chris Faust ACC/423 April 3, 2015 Todd Lawson Owners' Equity Paper This paper will give a brief overview of owners' equity and explain why it is important to keep paid-in capital separate from earned capital. It will also answer the questions is paid-in capital or earned capital more important, as well as, is basic or diluted earnings per share more important. Owners' equity consists of both earned capital and paid-in capital and separation of both is a necessity. Contributed (paid-in) capital is provided to the corporation by stockholders for use in business, is paid in on capital stock, includes premiums less discounts on issuance of the stock, and the par value of all stock outstanding (Kieso, Weygandt, & Warfield, 2013). As a company sells stock at a premium, there may be discounts based on items like a reward for service. This form of capital allows investors to assist in the growth potential or expansion of a company. Earned capital, develops from profitable operations, consists of undistributed income that remains invested in a company, and represents retained earnings (Kieso, Weygandt, & Warfield, 2013). As a company makes money from their daily operations, whether that is through the selling of a product, the fixing of machines, or even balancing the books for another company, the capability to bring in a profit from that is a very preferable option. It is important to keep paid-in capital and earned capital separate to avoid the confusion...
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...Owners' Equity Paper ACC 423 September 5, 2011 University of Phoenix Owners' Equity Paper The investments of stockholders, corporations depend a lot on to fund their business operations. The company stands to gain and grow from selling their stock, when viewing each entity separately. The investor hopes to gain and earn a profit by investing in a company in hopes that their stock prices will go up. The company and the investor depend on each other. The more opportunity the company has to grow with the more people invests. Also the more opportunities for the company to grow, the happier they are able to make their investors, who in turn spend more money. The owners’ equity discusses the importance that common stockholders and preferred stockholders require in a company. The stockholders are the entities who have paid-in capital to a company to offer the investment planned to be used for operations of the company. In the next paragraph it will be explained the meaning of maintained the paid-in capital detached from earned capital. Also, an investigation of how important can be the paid-in capital or earned capital to an investor; and from the investor point of view, the basic or diluted earnings per share is the most important. To further understand owners’ equity, the importance to keep paid-in capital independent from earned capital. Which is more important as an investor, paid-in capital or earned capital? Last which is more important as an investor, basic or diluted...
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...Owner’s Equity Paper Introduction Owner’s equity is defined as corporate, shareholders, or stockholders capital that is derived from daily activities of a company. Both paid-in and earned capital depict the reporting phase behind owner’s equity in an organization. Paid-in capital is defined as amount of contributed by stakeholders/investors to the organization when they acquire shares. Earned capital is referred to as accumulated income in the company. It is important to separate the two forms of capital. Separating paid-in capital from earned capital Earned capital and paid-in capital is the money that is owed to the owners of a company. Separation of the two is important because it will enable investors and shareholders of the company to distinguish the two forms of capital. Whereas paid-in capital is the amount paid by the stockholders to be used in running the business, earned capital is the amount of money driving from the commercial operations of the company. Separations of the two capitals are essential for stockholder and investor because it will enable them to monitor the financial position. Separation of earned capital from paid-in capital facilitates the trailing of earnings made as well as dividends disseminated in the company. In essence, paid-in capital has to be separated from earned capital because investors will be able gauge the performance of the company. Separating the two forms of capital enables the company to evaluate accumulated income in the...
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...Owner’s Equity Paper ACC/423 Katie Bradbury October 26, 2014 Raymond Ho Introduction Paid in capital is the source of raised by the company from equity, and not from ongoing operations in the stock markets in the form of shares. Earned capitals are the resources that a company will acquire in the form of income due to the sale of good and services the company offers. These capitals are both very important to the development and growth of the company’s daily operations. Investors believe that it is very important that both sources of capital are separated, for many different reasons. One reason for the separation is that both capitals are different funding foundations and that paid in capital indicates the assets will be used in the development of earned capital. Likewise, earned capital signifies that assets accumulated from the moneymaking process in the company. As a result, if the two sources are not separated this will create some misunderstanding. That is because paid in capital increase and enhances the earned capital. Merging the two sources of capital will cause a misunderstanding and falsification of the earning the firm has generated. Collaborating the two will also lead to complication in calculations with concern to profit margins. The two sources of capital must be divided this is because the shareholders and investors information must be unmistakably distinguished from one another. Both forms of capitals need to be distinguished for simple and assured...
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...Unit 2 Term Paper Gary M. Kidd Kaplan University Author Note Pro. Young-White, I’m sorry the term paper is a day late, but I spent most of 3 September at a scheduled medical procedure to refill the pain pump implanted in my spine with Dilaudid. It kept me knocked-out most of the day. Please remember that I’m given extra time on assignments via the Kaplan University office of student disabilities. Abstract This term paper for unit two review three articles, Ethics Consultation in United States Hospitals This term paper also defines 8 financial terms. Keywords: Balance sheet, Shareholder Equity, EBITDA, EBITDAM, Financial Ethics, Financial Benchmarking, Financial Trend Analysis, and Ratio Analysis. Unit 2 Term Paper Business ethics is the appropriate business guidelines and customs regarding debatable issues, like the way a CEO runs his company, illegal stock trading, corruption, business social and monetary obligations. The government’s authorities frequently enforce business ethics, still there are times when businesses alone will use a straightforward structure that organizations can abide by so that they simply may benefit the public interest (investopedia.com, 2013). Article Review The first article chosen for this assignment, is Betsy Gallup’s article Ethics Are an Important Part of Running a Health-Care Facility, and she explains ethics as having three components: independence, integrity and objectivity (2009)...
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...to start by defining equity according to the Webster’s Dictionary as ‘a body of legal doctrines and rules developed to enlarge, supplement, or override a narrow rigid system of law’ (Marriam-Webster.com). Also maxims is defined also by Webster’s Dictionary as ‘a general truth, fundamental principle, or rule of conduct’ (Marriam-Webster.com). Therefore the maxims of equity may fairly be described as a set of general principles which are said to govern the way in which equity operates. They tend to illustrate the qualities of equity, in contrast to the common law, as more flexible, responsive to the needs of the individual and more inclined to take account of the parties’ conduct and worthiness. In conducting this research, it cannot be said that there is a definitive list of the maxims: different sources give different examples and some works prefer to avoid the term altogether in favour of a broader discussion of the character of equity. Above all, the maxims are applied only when the court feels it appropriate: none of the maxims is in the nature of a binding rule and for each maxim it is possible to find as many instances of its not having been applied as instances where it has been. I will give such instance, such as the role of the maxims was discussed in the case of Tinsley v Milligan [1993] 3 All ER 65, (which I will not go in detail). In the Court of Appeal a flexible approach was taken to the application of the maxim, ‘he who comes to equity must come with clean...
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...Express Trusts – How do they work? LAW351 Equity & Trusts, Week 12 Friday Agenda Today * Trustees’ Powers * Trustees’ Rights * Beneficiaries’ Rights * Remedies for Breach of Trust Trustees Powers * The trustee has the powers conferred upon him in the trust instrument. If any * First in the instrument then look at the act(statute), if that fails you go to the court and seek a court order Statutory Trustees’ Powers * In addition to these, trustees have a variety of statutory powers, including: * The power to sell property (s27(1)(a), (b), (c)); * The power to lease property (s27(1)(d), (e)) including the power to renew leases under s36; * The power to expend money to repair, maintain or renovate property (s30(1)(a)). * If money is expended to improve or develop the property then the amount is limited to $20 000 ($50 000 if the trustee is acting on the advice of someone who the trustee reasonably believes to be competent to advise on improvement and development). * unless the Court consents (s30(1)(c)); * The power to “make decisions” with respect to any debts. (s42); * The power to insure the trust property (s46) and the power to use any insurance payout to replace, repair, rebuild etc damaged trust property (s47(4)). Here it is the power to insure – in the last lectures we have looked at the duty to insure. * The power to raise money by selling or mortgaging trust property...
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...Jun.25th 2014 Background Timken Company Overview Founded in 1898 by Henry Timken and incorporated in 1904, The Timken Company (“Timken” or “the company”), is headquartered in Canton, Ohio. Timken is the largest manufacturer of tapered roller bearings and alloy seamless mechanical steel tubing in the United States and a leading global manufacturer of highly-engineered bearings, alloy and specialty steels, and a provider of related products and services. Timken is the largest North American-based bearings manufacturer. The company has operations in 29 countries on six continents. As of December 31, 2005, Timken employed approximately 27,000 people. On February 18, 2003, Timken completed the acquisition of The Torrington Company (Torrington), a manufacturer of needle bearings used in transmission and wheel applications. Torrington is now integrated into the company, and has added tremendous scale to Timken’s operations. Torrington Company Overview Founded in 1866 as Excelsior Needle Company, a maker of sewing-machine needles, The Torrington Company was an old-line industrial firm. Torrington operated its business in two segments that were familiar to Timken: automotive and industrial. Sales were approximately equal across the two segments. The OEM business focused on higher-margin niche products. Torrington’s 2002 sales were split as follows: 73% in North America, 17% in Europe, and 10% elsewhere. The company employed 10,500 workers at 27 plants worldwide, and served...
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...to replace the earlier notion that he should draft a contract, and one month passed. BTT then sent Chou a fax requesting that he send a draft for a distribution agreement contract. Despite the fact that Chou did so immediately after receiving the BTT fax, several more months passed without response from BTT. BTT had a change in management and informed Chou they were not interested in distributing Strat. READ ENTIRE DOCUMENT BELOW (2.1) FOR SUPPORTING EVIDENCE: 2.1 The law provides certain relief for aggrieved parties that suffer losses as a result of another party’s breach of contract. These relief mechanisms are collectively referred to as remedies. Recall the distinction discussed in Chapter 1 between remedies at law and remedies in equity. For many contracts, the remedy at law...
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...How do the courts deal with Constructive Trust in the Trust of the Family Home? – Is Constructive Trust governed by coherent guidelines or is it a mere fallacy? Scholastic research shows many attempts at defining a Trust . While this area of law has developed over the years, its purpose has always been to confer a benefit to a beneficiary for a specified purpose under the control of a trustee. A constructive trust is therefore not a ‘real’ trust by the traditional definition of a trust and often referred to as a legal fiction created by the courts as a remedy for unjust enrichment. According to Watts (2011), a constructive trust arises by operation of law where the facts are such that it would be unconscionable for an owner to deny that another...
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...Formalities – Perfect/Imperfect Trust Introduction The question in this case refers to the creation of a trust, i.e. the formalities that are required. In the case of Serena, she has created a trust that holds the property in trust for Alice for life and then the remainder goes to Alice’s children. On the death of Serena, there is a valid will where Alice gets all of the property and there is no interest for Alice’s children. Therefore, the following advice is going to identify a trust is in place, which will ensure that the property transfers to the children. The Creation of a trust The case of Milroy v Lord identifies a perfect trust, which includes; 1) a deed of the trust; and 2) transfer of the property following all formalities . Therefore, in the case of the trust created by Serena, both the property “Hillside” and the Jane Austin books have the capability of being part of a perfect trust. However, in the case of the land there are additional formalities, which will be discussed later. At this point there is a perfect trust that related to the books, because this is a case of a perfect trust, because there is both declaration and transfer of the books to the trustees . The share certificate and cheque are not in the deed documents, but have been transferred to the trustee with the declaration “to be added to the trust”. This is not a full deed, but applying the case of Milroy v Lord it is a declaration plus transfer of the property, which means that it has a capability...
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...Running Head: Financing Alternatives Lester Electronics Financing Alternative Benchmarking for Bernard Lester University of Phoenix MBA – 540 Introduction In this paper will compare and contrast issues that various companies had experienced in past mergers to the issues presented in the Lester Electronic Scenario. The companies benchmarked are Disney-Pixar, Lucent-Alcatel, Monaco Coach Corporation, SMC Corporation, Infosmart-Cyber Merchants, Fidelity Bank of Nassau, Royal Bank of Canada, and AT&T. One of the issues presented in the scenario is that LEI was preparing to conduct a joint venture with Shang-wa when Transnational Electronics made an offer to acquire Shang-wa. The main issue is that if Shang-wa is acquired by TEC, the joint venture between Shang-wa and LEI will not be possible. LEI intends to remain as the company of choice but this might not be possible if TEC acquires Shang-wa. Some of the concepts that Team A will evaluate considering the LEI scenario issues are: capital management strategies to maximize shareholder wealth, economic exposure, the challenges of cross-border growth strategies, working capital management, and internal and external growth strategies, and cultural barriers, while identify the best financing alternative for the merger. Companies Benchmarked Alcatel-Lucent – Yolanda Smothers Alcatel-Lucent provides telecommunications...
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...should be studied in conjunction with Module 2 in this course and should also be considered in relation to competing assignments of equitable interests in the course on Trusts. The priority rules Competing legal interests The general rule for determining priority between competing legal interests is that priority is given to the one created first in time. Competing priority of company charges is determined by the Corporations Act 2001 (Cth). Competing equitable interests The general rule Where the competing interests are equitable, the general rule is that if the equities are equal, the first in time will prevail. Latec Investments Ltd v Hotel Terrigal Pty Ltd (1965) 113 CLR 265 Wu v Glaros (1991) 55 SASR 408 Precise classification of the competing equitable interests is largely irrelevant to determining priority between them, unless one of the competing equitable interests is in fact a mere equity or the earlier equitable interest is a beneficial...
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...MANDATES Piec vs. Caisse d’economie polonaise (p. 59) 01-Jul-92 Date of Bad Boy’s forged mandate 15-May-92 Bad Boy gets mandate from Grandma 03-Jul-92 Grandma dies 11-Aug-92 Bad Boy gives forged mandate to bank Bad Boy comes to Canada 18-Aug-92 Bad Boy withdraws $26k payable too cash Grandma = Stephania Wojcicka Bad Boy = nephew Tadeusz Wojcicki Niece (Margaret Wojcicka) is executor of will Facts | * Three mandates: 1. Gma goes on extended trip, gives power of attorney for banking matters to Bad Boy 2. Niece has mandate as executor of the will (mandate only kicks in when Gma dies) 3. Bank has mandate for Gma’s finances * Grandma’s bank account summary: $5 membership, $1k term deposit, $26k term deposit (can’t take out until 26-Oct-92 or wil receive no interest) * Bank didn’t k6now Gma was dead when Bad Boy removed funds | Question | 1. Was bank guilty of not [2138] exercising prudence and diligence for its [2130] mandate? 2. Does the valid mandate authorize the bank to give the term deposits (no) 3. What effect should be given to the letter of july 1st (none) 4. Did the bank owe obligation to grandma, and not rely on the letter (yes, 2138) | Ratio | 1. Argument: Bank is a special type of agent, v. strong fiduciary duties; if they’ve been defrauded they are 100% liable. Answer: Bank should have been more [2138] prudent and diligent; it wasn’t prudent cash out the account, and the bank wasn’t diligent in its duty...
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