Objectives:

1. Understand the nature and formation of a corporation

2. Determine the accounting titles in recording share capital transactions
3. Be able to account the issuance of share capital
4. Know the definition of and accounting for treasury shares
5. Identify the different types of dividends issued by a corporation
6. Be able to prepare a statement of retained earnings and shareholder's equity section in
the statement of financial position

 Nature and Formation of a Corporation

i. Laws on Formation of a Corporation
ii. Attributes of a Corporation
a. Artificial being
b. Created by operation of law
c. Has the right of succession
d. Has the powers, attributes and properties expressly authorized by law or incident to its
existence
i. Characteristics of Corporation
ii. Difference Between a Partnership and a Corporation
iii. Classes of Shares of Stocks
iv. Other Terminologies
a. Authorized Capital Stock
b. Subscribed Capital Stock
c. Subscription Receivable
d. Unissued Share Capital
e. Issued and Outstanding Shares
f. Legal Capital
g. Additional Paid-in Capital
 share premium
 additional paid-in capital - stock dividend
 additional paid-in capital - treasury share
 additional paid-in capital - donated assets
h. Contributed Capital

 Accounting for Issuance of Shares of Stocks

i. Shareholder's Equity Section
ii. Accounting for Formation of a Corporation
a. Memorandum Entry Method
b. Journal Entry Method

 Treasury Shares
 Concept of Treasury Shares
 Cost Method of Accounting for Treasury Shares
 Accounting for Stock Split
 Stock Split Up
 Stock Split Down

 Retained Earnings
 Concept of Retained Earnings
 Types of Retained Earnings
 Free or Unappropriated Retained Earnings
 Restricted or Appropriated Retained Earnings
 Dividends
 Concept of Dividends
 Types of Dividends
 Cash Dividend
 Stock Dividend
 Scrip Dividend