Understanding Stockholders' Equity: Increase and Differences in

School: Saint Leo University - Course: ACC 201 - Subject: Accounting

In this Module, we learn about Stockholders' Equity (Chapter 13).This week's discussion questions are as follows: 1).What are 2 ways in which a company's STOCKHOLDER'S EQUITY would be increased. "Owners invest in stock and Common Stock is credited and increases" (Libretexts, 2022). "Business generates net income and Retained Earnings is credited and increases" (Libretexts, 2022). 2).Discuss the differences between a) authorized shares, b) issued shares, and c) outstanding shares. Authorized shares: "The maximum number of shares of stock that the corporate charter allows the corporation to issue" (Miller-Nobles & Mattison, 2020, PG MP-1). Issued Shares: "Stock that has been issued but may or may not be held by stockholders" (Miller-Nobles & Mattison, 2020, PG MP-1). Outstanding Shares: "Issued stock in the hands of stockholders" (Miller-Nobles & Mattison, 2020, PG MP-1). 3).What is treasury stock and why would a company choose to engage in the purchase of it? "Treasury Stock" "A corporation's own stock that it has previously issued and later reacquired. There are several reason why a company may want to purchase treasury stock: "Management wants to increase net assets by buying low and selling high" "Management wants to support the company's stock price" "Management wants to avoid a takeover by an outside party by reducing the number of outstanding shares that have voting rights" "Management wants to reward valued employees with stock" (Miller-Nobles & Mattison, 2020, pg F13- 11). Libretexts. (2022, October 3).1.9: Changes in Stockholders' Equity. Business LibreTexts. https://biz.libretexts.org/Bookshelves/Accounting/Book:_Principles_of_Financial_Accou nting_(Jonick)/01:_Accounting_Cycle_for_the_Service_Business_- _Cash_Basis/1.09:_Changes_in_Stockholders'_Equity

Miller-Nobles, T., & Mattison, B. (2020).Horngren's Financial & Managerial Accounting: The Financial Chapters -- MyLab Accounting with Pearson eText Access Code(7th ed.). Pearson. (Miller-Nobles & Mattison, 2020)