Activation Exercise 13-1: Issuing Stock Terms and Definitions: A corporation is

Question

Activation Exercise 13-1: Issuing Stock Terms and Definitions: A corporation is a legal entity, distine and separte from the individual why create and operate it. As a legal entity, it can sell shares of owership called stock. In many cases, a dollar amount may be assigned to each share of stock, this is called the_______of the shares. When only one class of stock is issued, it is called common stock. A corporation may issue more than one class of stock. Is this case, the second class of stock will have various preference rights, such as a preference to dividends, and is called________....

Explanation / Answer

1. par value - the dollar value assigned is called a face value of a share (without any discount or premium)

2. preferred stock - these classes of stock have high preferrence over common stock as dividend distribution and liquidation payment distribution

3. Authorised - no company can issue above and more than the authorised share mentioned in the balance sheet / financial statement

4. issued - number of shares previously sold to shareholders are the share issued to them.

5. outstanding - number of share remaining in hand are outstanding share according to which dividend is paid on

6. Premium - share issued over its par value is called share is issued at premium

7. Discount - share issued below / lower of its par value is called share issued at discount

8. issued date cash received

january 6 18550 share * $29 = $537950

May 10 4600 share * $20 = $92000   

June 22 25100 share * $28 = $702800

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