(本科）会计专业英语chapter 5教学课件.ppt

YCF正版可修改PPT(本科）会计专业英语chapter 5教学课件Chapter 5 Owners Equity2Mini CasepDaffodil Inc.has decided to expand its operations to owning and operating theme parks.The following is an excerpt from a conversation between the chief executive officer,Joann Hanson,and the vice-president of finance,Chris Fowler.pJoann:Chris,have you given any thought to how were going to finance the acquisition of Water Wave Corporation?pChris:Well,the two basic options,as I see it,are to issue either preferred stock or bonds.The equity market is a little depressed right now.The rumor is that the Federal Reserve Bank is going to increase the interest rates either this month or next.pJoann:Yes,Ive heard the rumor.The problem is that we cant wait around to see whats going to happen.Well have to move on this next week if we want any chance to complete the acquisition of Water Wave.pChris:Well,the bond market is strong right now.Maybe we should issue debt this time around.pJoann:Thats what I would have guessed as well.Water Waves financial statements look pretty good,except for the volatility of their income and cash flows.But thats characteristic of their industry.Discuss:The advantages and disadvantages of issuing preferred stock versus bonds.Learning objectivesp1.Appreciate the advantages and disadvantages of the corporate form of organizationp2.Describe the equity types in a companyp3.Understand the classification of shares in a companyp4.Apply the accounting for different equity4ContentpTopic 1:Forms of business organizationpTopic 2:Equity in companypTopic 3:Classification of sharespTopic 4:Accounting for different equity5Topic 1:Forms of business organizationpSingle proprietorshipsCharacteristics of single proprietorshipThe business and its owner are not regarded as separate entities.The proprietorships liability is unlimited.Advantages and disadvantages of the proprietorshipA proprietorship itself is not subject to taxation of income.Unlimited liability and limitations on size.6Topic 1:Forms of business organizationpPartnershipsSignificant features of a PartnershipEase of formation.Limited life.Mutual agency.Unlimited liabilities.Co-ownership of partnership property and profits.7Topic 1:Forms of business organizationpPartnershipsAdvantages and disadvantages of a partnershipeasier and less expensivedoes not have to pay income taxes as does a corporationLimited lifeunlimited liabilitymutual agencylimited ability to raise funds.8Topic 1:Forms of business organizationpCorporations Advantages of the corporate form of organizationNo personal liability for stockholders.Ease of accumulating capital.Ownership shares are readily transferable.Continuous existence.Professional management.9Topic 1:Forms of business organizationpCorporations Disadvantages of the corporate form of organizationHeavy taxation.Greater regulation.Separation of ownership and control.10End11