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  • Module 4 - SoCE

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    Anne Morales
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    The document discusses the statement of changes in equity (SoCE) and equity accounts used by corporations. It defines equity as the residual claim of ownership over a company's assets after deducting all obligations. It also describes different forms of business organization like sole proprietorship, partnership, and corporation. For corporations, equity accounts include paid-in capital from stock issuances, capital stock at par value, additional paid-in capital from stock prices above par value, retained earnings from undistributed profits, and dividends paid to shareholders. Students are assigned to prepare exercises on the SoCE starting next week.

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    The document discusses the statement of changes in equity (SoCE) and equity accounts used by corporations. It defines equity as the residual claim of ownership over a company's assets after deducting all obligations. It also describes different forms of business organization like sole proprietorship, partnership, and corporation. For corporations, equity accounts include paid-in capital from stock issuances, capital stock at par value, additional paid-in capital from stock prices above par value, retained earnings from undistributed profits, and dividends paid to shareholders. Students are assigned to prepare exercises on the SoCE starting next week.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    5 views10 pages

    Module 4 - SoCE

    Uploaded by

    Anne Morales
    The document discusses the statement of changes in equity (SoCE) and equity accounts used by corporations. It defines equity as the residual claim of ownership over a company's assets after deducting all obligations. It also describes different forms of business organization like sole proprietorship, partnership, and corporation. For corporations, equity accounts include paid-in capital from stock issuances, capital stock at par value, additional paid-in capital from stock prices above par value, retained earnings from undistributed profits, and dividends paid to shareholders. Students are assigned to prepare exercises on the SoCE starting next week.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
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    of 10

    STATEMENT OF

    CHANGES IN EQUITY
    MODULE 4
    OBJECTIVES:
    Understand the purpose of the SoCE

    Appreciate that the presentation of the SoCE is dependent on the form of business
    organization

    Identify the elements of the SoCE

    Determine the nature of the different equity accounts used by corporations

    Prepare a SoCE
    EQUITY

    The residual claim of the owner


    of the company over its assets
    after deducting all its obligations.
    FORMS OF BUSINESS ORGANIZATION
    ● SOLE PROPRIETORSHIP, simplest form of business organization.
    The business has NO LEGAL personality separate from its
    owner.
    ● PARTNERSHIP, business is owned by two or more owners called
    partners.
    ● CORPORATION, owned by many owners called stockholders or
    shareholders.
    Preparation of Statement of Changes in Equity
    Preparation of Statement of Changes in Equity
    Preparation of Statement of Changes in Equity

    Corporation
    The law defines it as “an artificial being created by operation of law, having the right of
    succession and the powers, attributes, and properties expressly authorized by law or
    incident to its existence”.
    · Paid-in Capital – contributions by investors in exchange of company’s common stock
    · Capital Stock – refers to amount at par value from the issued common shares
    · Par Value – least amount a corporation can issue its stocks to shareholders
    · Additional Paid-in Capital – issued price of stock less par value
    · Retained Earnings – the undistributed earnings of a corporation
    · Dividends – are distributions to stockholders by a corporation
    Preparation of Statement of Changes in Equity
    Preparation of Statement of Changes in Equity
    ASSIGNMENTS

    Be ready for our


    exercises starting NEXT
    WEEK!!!

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