MODULE 24(ACTIVITY 1)

Name: MYLENE NELLAS HERAGA Class number: BLOCK 4

Section: BSA 1-COC-A Schedule: W/S 8am-12pm Date: OCT. 30,2021

Activity 1: What I Know Chart

What I Know Questions: What I Learned

The account titles that are What are the accounts
included in the capital of included in the capital of
the Corporation are the corporation?
following: I’ve learned that the
1. Share Capital accounting for the sale
- It is the shares to be of shares by a
subscribed and paid in or
corporation depends on
secured to be paid in by
the shareholders, either in whether the share
money, property or capital has a par or
services, at the time of stated value. If there is
organization of the a par or stated value,
corporation or afterwards, the amount of the
and upon which is to proceeds representing
conduct its operations. the aggregate par or
The share, contributed or
stated value is credited
paid-in capital is further
divided into the following: to the common or
a. Legal Capital is the preferred share capital
portion of the contributed account. The aggregate
capital of the minimum par or stated value is
amount of paid-in capital, generally defined as
which must remain in the legal capital not subject
corporation for protection to distribution to
of corporate creditors. In
case of:
shareholders. Proceeds
-Par value shares, legal in excess of par or
capital is the aggregate par stated value are
value of all issued and credited to an additional
subscribed shares. contributed capital
-No-par shares, legal account. The additional
capital is the total contributed capital
consideration received by represents the amount
the corporation for the
issuance of its shares to
in excess of the legal
capital that may, under
the shareholders including certain defined
the excess of issue price conditions, be
over stated value. distributed to
b. Share Premium
shareholders. A
(Additional Paid-In
Capital). It is the portion of corporation selling
the paid capital shares below par value
representing amounts by credits the share capital
paid b shareholders in account for the par
excess of par. value and debits an
2. Authorized Share offsetting discount
Capital account for the
- The number of authorized
difference between par
share indicates the
maximum number of share value and the amount
the corporation can issue actually received.
as specified in the article of
incorporation.
3. Issued Share Capital
- These are shares which
have a sold and paid in
full.
4. Unissued Share Capital
- Represents the total
number of available shares
in the control of a
corporation at any point.
5. Subscribed Share
Capital
-It is the portion of the
authorized share capital
that has been subscribed
but not yet fully paid.
6. Outstanding Share
Capital
-These are issued shares,
which are in the hands of
the shareholders.
7. Treasury Stock
-These are issued shares
acquired by the
corporation but not retired
and are therefore, awaiting
to be reissued at a later
date.
Share Capital represents What is share capital?
the amount invested by I’ve learned that Share
shareholders. It is the Capital plays a very important
shares to be subscribed role in the structure of a
and paid in or secured to limited company. Each
be paid in by the company, with share capital,
has both authorized and
shareholders, either in
issued shares, which can be
money, property or used to raise finance,
services, at the time of determine ownership and
organization of the transfer ownership from one
corporation or afterwards, party to another. A share
and upon which is to itself is a unit of ownership in
conduct its operations. It a company, which has an
is the amount of capital accumulation of rights,
fixed or indicated in the interests and obligations.
articles of incorporation Owning a share does not
which is divided in shares necessarily mean that you
have direct control over the
of stock.
day to day operations of a
business, particularly if you
only hold a small percentage
of the issued share capital,
however it does entitle you to
an equal distribution of any
profits declared in the form of
a dividend. To help you gain
a better understand of share
capital we will review some of
the key terms associated with
it.

1.Cash Dividend What are the different I’ve learned that A

- is the most common form kinds of dividends
of dividends distributed to issued by the A dividend is the
the shareholders corporation? distribution of some of a
2. Share Dividends company's earnings to a
- A corporation may class of its shareholders,
distribute to shareholders
as determined by the
additional shares of the
entity’s own share as company's board of
share dividends. directors. Common
 The accounting shareholders of
entries depend dividend-paying
upon the size of the companies are typically
share dividend, eligible as long as they
1. Small Share own the stock before the
Dividends – are ex-dividend date.
dividends in
 which the
additional shares Dividends represent the
are less than distribution of corporate
20% of the profits to shareholders,
previously based upon the number
outstanding of shares held in the
shares.
company. Shareholders
2. Large Share
Dividend – If he expect the companies
share dividend is that they invest in to
20% or more of return profits to them,
the previously but not all companies
outstanding pay dividends. Some
shares such that companies keep profits
the effect is to as retained earnings that
reduce are earmarked for re-
materially the investment in the
market value per company and its growth,
share, then only
giving investors capital
the par or stated
Value is credited
gains. Often, growth
to ordinary companies retain
shares with a earnings while more
corresponding mature companies resort
debit to retained to dividend payouts.
earnings.