{"id":819,"date":"2015-05-13T17:45:53","date_gmt":"2015-05-13T17:45:53","guid":{"rendered":"https:\/\/courses.candelalearning.com\/finacct2x10xmaster\/?post_type=chapter&#038;p=819"},"modified":"2015-05-28T22:27:32","modified_gmt":"2015-05-28T22:27:32","slug":"the-stockholders-equity-section-of-the-balance-sheet","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/chapter\/the-stockholders-equity-section-of-the-balance-sheet\/","title":{"raw":"The Stockholder's Equity Section of the Balance Sheet","rendered":"The Stockholder&#8217;s Equity Section of the Balance Sheet"},"content":{"raw":"<div class=\"page\" title=\"Page 3\">\r\n<div class=\"section\">\r\n<div class=\"layoutArea\">\r\n<div class=\"column\">\r\n\r\nTo summarize and review this unit, we will look at how each item is reported in the Stockholder's Equity section of the balance sheet.\r\n\r\nhttps:\/\/youtu.be\/AP_aXM8sMfc\r\n\r\nThe video explains we have 3 sections in stockholder's equity:\r\n<ul>\r\n\t<li>Paid in Capital: includes common stock, preferred stock, and any Paid in Capital accounts including Paid in Capital for treasury stock.<\/li>\r\n\t<li>Retained Earnings:\u00a0comes from the Statement of Retained Earnings financial statement<\/li>\r\n\t<li>Treasury Stock: reports the cost we paid for Treasury Stock and this reduces total equity<\/li>\r\n<\/ul>\r\nWhen we report Common or Preferred stock, we also must include the details in the accounts including par, no-par or stated value and shares authorized, issued and outstanding.\u00a0 Let's look at a real company example.\r\n\r\n&nbsp;\r\n<h1 class=\"title\">What does Kohl\u2019s 2015 Form 10-K communicate about its stockholders\u2019\u00a0equity?<\/h1>\r\n<p class=\"post-meta\"><span class=\"comments\">\u00a0<\/span><\/p>\r\n\r\n<div class=\"entry\">\r\n\r\n<a href=\"https:\/\/wtietz.files.wordpress.com\/2015\/04\/kohls-from-ksl.jpg\"><img class=\"size-medium wp-image-1339\" src=\"https:\/\/wtietz.files.wordpress.com\/2015\/04\/kohls-from-ksl.jpg?w=300&amp;h=175\" alt=\"Source: www.ksl.com\" width=\"300\" height=\"175\" \/><\/a>\r\n\r\nKohl\u2019s Corporation (<a href=\"http:\/\/www.kohlscorporation.com\/InvestorRelations\/sec-filings.htm\">KSS<\/a>) operates department stores in 49 states in the U.S. and has annual sales in excess of $18 billion. Its fiscal year ends on the Saturday closest to January 31 each year.\r\n\r\nKohl\u2019s has several line items comprising its stockholders\u2019 equity.\u00a0 See the excerpts to follow from Kohl\u2019s 2015 Form 10-K: its Consolidated Balance Sheets, an enlarged partial Consolidated Balance Sheet (page F-3), its Consolidated Statements of Changes in Shareholders\u2019 Equity (page F-5), and a section from its Notes to Financial Statements (page F-8).\r\n\r\n<strong>Financial Statements<\/strong>\r\n\r\n<em><strong>Kohl\u2019s Corporation Consolidated Balance Sheets from p. F-3 of Form 10-K as of January 31, 2015:<\/strong><\/em>\r\n\r\n<a href=\"https:\/\/wtietz.files.wordpress.com\/2015\/04\/kohls-balance-sheet-2015.jpg\"><img class=\"alignnone wp-image-1340 size-full\" src=\"https:\/\/wtietz.files.wordpress.com\/2015\/04\/kohls-balance-sheet-2015.jpg?w=588\" alt=\"kohls-balance-sheet-2015\" \/><\/a>\r\n\r\n<em><strong>Kohl\u2019s Corporation Consolidated Balance Sheets from p. F-3 of Form 10-K as of January 31, 2015 (enlarged Shareholders\u2019 Equity section):<\/strong><\/em>\r\n\r\n<a href=\"https:\/\/wtietz.files.wordpress.com\/2015\/04\/kohls-stockholders-equity-enlarged-2015.jpg\"><img class=\"alignnone size-full wp-image-1341\" src=\"https:\/\/wtietz.files.wordpress.com\/2015\/04\/kohls-stockholders-equity-enlarged-2015.jpg?w=588&amp;h=96\" alt=\"kohls-stockholders-equity-enlarged-2015\" width=\"588\" height=\"96\" \/><\/a>\r\n\r\n<em><strong>\u00a0<\/strong><strong>Kohl\u2019s Corporation Consolidated Statements of Changes in Shareholders\u2019 Equity from p. F-5 of Form 10-K as of January 31, 2015:<\/strong><\/em>\r\n\r\n<a href=\"https:\/\/wtietz.files.wordpress.com\/2015\/04\/kohls-stockholders-equity-stmt-2015.jpg\"><img class=\"alignnone size-full wp-image-1342\" src=\"https:\/\/wtietz.files.wordpress.com\/2015\/04\/kohls-stockholders-equity-stmt-2015.jpg?w=588&amp;h=302\" alt=\"kohls-stockholders-equity-stmt-2015\" width=\"588\" height=\"302\" \/><\/a>\r\n\r\n<em><strong>Excerpt from Notes to Financial Statements on p. F-8 of Form 10-K as of January 31, 2015:<\/strong><\/em>\r\n\r\n<a href=\"https:\/\/wtietz.files.wordpress.com\/2015\/04\/kohls-notes-2015.jpg\"><img class=\"alignnone size-full wp-image-1343\" src=\"https:\/\/wtietz.files.wordpress.com\/2015\/04\/kohls-notes-2015.jpg?w=588&amp;h=134\" alt=\"kohls-notes-2015\" width=\"588\" height=\"134\" \/><\/a>\r\n\r\n<\/div>\r\n&nbsp;\r\n\r\n<strong>Questions<\/strong>\r\n<ol>\r\n\t<li>Why would a fiscal year end of \u201cthe Saturday closest to January 31 each year\u201d make sense for Kohl\u2019s?<\/li>\r\n\t<li>What types of stock is Kohl\u2019s authorized to issue? How many shares of each type are authorized to be issued?<\/li>\r\n\t<li>Approximately how many shares of common stock had been issued as of January 31, 2015?<\/li>\r\n\t<li>Approximately how many shares of common stock were outstanding as of January 31, 2015? (Hint: You will need to calculate this number.)<\/li>\r\n\t<li>Why is treasury stock shown as a negative on the balance sheet?<\/li>\r\n\t<li>Has Kohl\u2019s accumulated earnings to date exceeded its accumulated losses and dividends declared to date? How do you know?<\/li>\r\n<\/ol>\r\n<\/div>\r\n<\/div>\r\n<\/div>\r\n<\/div>","rendered":"<div class=\"page\" title=\"Page 3\">\n<div class=\"section\">\n<div class=\"layoutArea\">\n<div class=\"column\">\n<p>To summarize and review this unit, we will look at how each item is reported in the Stockholder&#8217;s Equity section of the balance sheet.<\/p>\n<p><iframe loading=\"lazy\" id=\"oembed-1\" title=\"Stockholders Equity (B\/S Presentation, Authorized, Issued, Outstanding Shares, C\/S &amp; P\/S)\" width=\"500\" height=\"375\" src=\"https:\/\/www.youtube.com\/embed\/AP_aXM8sMfc?feature=oembed&#38;rel=0\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<p>The video explains we have 3 sections in stockholder&#8217;s equity:<\/p>\n<ul>\n<li>Paid in Capital: includes common stock, preferred stock, and any Paid in Capital accounts including Paid in Capital for treasury stock.<\/li>\n<li>Retained Earnings:\u00a0comes from the Statement of Retained Earnings financial statement<\/li>\n<li>Treasury Stock: reports the cost we paid for Treasury Stock and this reduces total equity<\/li>\n<\/ul>\n<p>When we report Common or Preferred stock, we also must include the details in the accounts including par, no-par or stated value and shares authorized, issued and outstanding.\u00a0 Let&#8217;s look at a real company example.<\/p>\n<p>&nbsp;<\/p>\n<h1 class=\"title\">What does Kohl\u2019s 2015 Form 10-K communicate about its stockholders\u2019\u00a0equity?<\/h1>\n<p class=\"post-meta\"><span class=\"comments\">\u00a0<\/span><\/p>\n<div class=\"entry\">\n<p><a href=\"https:\/\/wtietz.files.wordpress.com\/2015\/04\/kohls-from-ksl.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-1339\" src=\"https:\/\/wtietz.files.wordpress.com\/2015\/04\/kohls-from-ksl.jpg?w=300&amp;h=175\" alt=\"Source: www.ksl.com\" width=\"300\" height=\"175\" \/><\/a><\/p>\n<p>Kohl\u2019s Corporation (<a href=\"http:\/\/www.kohlscorporation.com\/InvestorRelations\/sec-filings.htm\">KSS<\/a>) operates department stores in 49 states in the U.S. and has annual sales in excess of $18 billion. Its fiscal year ends on the Saturday closest to January 31 each year.<\/p>\n<p>Kohl\u2019s has several line items comprising its stockholders\u2019 equity.\u00a0 See the excerpts to follow from Kohl\u2019s 2015 Form 10-K: its Consolidated Balance Sheets, an enlarged partial Consolidated Balance Sheet (page F-3), its Consolidated Statements of Changes in Shareholders\u2019 Equity (page F-5), and a section from its Notes to Financial Statements (page F-8).<\/p>\n<p><strong>Financial Statements<\/strong><\/p>\n<p><em><strong>Kohl\u2019s Corporation Consolidated Balance Sheets from p. F-3 of Form 10-K as of January 31, 2015:<\/strong><\/em><\/p>\n<p><a href=\"https:\/\/wtietz.files.wordpress.com\/2015\/04\/kohls-balance-sheet-2015.jpg\"><img decoding=\"async\" class=\"alignnone wp-image-1340 size-full\" src=\"https:\/\/wtietz.files.wordpress.com\/2015\/04\/kohls-balance-sheet-2015.jpg?w=588\" alt=\"kohls-balance-sheet-2015\" \/><\/a><\/p>\n<p><em><strong>Kohl\u2019s Corporation Consolidated Balance Sheets from p. F-3 of Form 10-K as of January 31, 2015 (enlarged Shareholders\u2019 Equity section):<\/strong><\/em><\/p>\n<p><a href=\"https:\/\/wtietz.files.wordpress.com\/2015\/04\/kohls-stockholders-equity-enlarged-2015.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-1341\" src=\"https:\/\/wtietz.files.wordpress.com\/2015\/04\/kohls-stockholders-equity-enlarged-2015.jpg?w=588&amp;h=96\" alt=\"kohls-stockholders-equity-enlarged-2015\" width=\"588\" height=\"96\" \/><\/a><\/p>\n<p><em><strong>\u00a0<\/strong><strong>Kohl\u2019s Corporation Consolidated Statements of Changes in Shareholders\u2019 Equity from p. F-5 of Form 10-K as of January 31, 2015:<\/strong><\/em><\/p>\n<p><a href=\"https:\/\/wtietz.files.wordpress.com\/2015\/04\/kohls-stockholders-equity-stmt-2015.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-1342\" src=\"https:\/\/wtietz.files.wordpress.com\/2015\/04\/kohls-stockholders-equity-stmt-2015.jpg?w=588&amp;h=302\" alt=\"kohls-stockholders-equity-stmt-2015\" width=\"588\" height=\"302\" \/><\/a><\/p>\n<p><em><strong>Excerpt from Notes to Financial Statements on p. F-8 of Form 10-K as of January 31, 2015:<\/strong><\/em><\/p>\n<p><a href=\"https:\/\/wtietz.files.wordpress.com\/2015\/04\/kohls-notes-2015.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-1343\" src=\"https:\/\/wtietz.files.wordpress.com\/2015\/04\/kohls-notes-2015.jpg?w=588&amp;h=134\" alt=\"kohls-notes-2015\" width=\"588\" height=\"134\" \/><\/a><\/p>\n<\/div>\n<p>&nbsp;<\/p>\n<p><strong>Questions<\/strong><\/p>\n<ol>\n<li>Why would a fiscal year end of \u201cthe Saturday closest to January 31 each year\u201d make sense for Kohl\u2019s?<\/li>\n<li>What types of stock is Kohl\u2019s authorized to issue? How many shares of each type are authorized to be issued?<\/li>\n<li>Approximately how many shares of common stock had been issued as of January 31, 2015?<\/li>\n<li>Approximately how many shares of common stock were outstanding as of January 31, 2015? (Hint: You will need to calculate this number.)<\/li>\n<li>Why is treasury stock shown as a negative on the balance sheet?<\/li>\n<li>Has Kohl\u2019s accumulated earnings to date exceeded its accumulated losses and dividends declared to date? How do you know?<\/li>\n<\/ol>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-819\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Shared previously<\/div><ul class=\"citation-list\"><li>What does Kohl&#039;s 2015 Form 10-K communicate about its stockholdersu2019 equity?. <strong>Authored by<\/strong>: Dr. Wendy Tietz, CPA, CMA, CGMA. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"http:\/\/www.accountingintheheadlines.com\">http:\/\/www.accountingintheheadlines.com<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by-nc\/4.0\/\">CC BY-NC: Attribution-NonCommercial<\/a><\/em><\/li><\/ul><div class=\"license-attribution-dropdown-subheading\">All rights reserved content<\/div><ul class=\"citation-list\"><li>Stockholders Equity (B\/S Presentation, Authorized, Issued, Outstanding Shares, C\/S &amp; P\/S) . <strong>Authored by<\/strong>: Allen Mursau. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/youtu.be\/AP_aXM8sMfc\">https:\/\/youtu.be\/AP_aXM8sMfc<\/a>. <strong>License<\/strong>: <em>All Rights Reserved<\/em>. <strong>License Terms<\/strong>: Standard YouTube License<\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section>","protected":false},"author":1195,"menu_order":9,"template":"","meta":{"_candela_citation":"[{\"type\":\"copyrighted_video\",\"description\":\"Stockholders Equity (B\/S Presentation, Authorized, Issued, Outstanding Shares, C\/S & P\/S) \",\"author\":\"Allen Mursau\",\"organization\":\"\",\"url\":\"https:\/\/youtu.be\/AP_aXM8sMfc\",\"project\":\"\",\"license\":\"arr\",\"license_terms\":\"Standard YouTube License\"},{\"type\":\"cc\",\"description\":\"What does Kohl\\'s 2015 Form 10-K communicate about its stockholdersu2019 equity?\",\"author\":\"Dr. Wendy Tietz, CPA, CMA, CGMA\",\"organization\":\"\",\"url\":\"www.accountingintheheadlines.com\",\"project\":\"\",\"license\":\"cc-by-nc\",\"license_terms\":\"\"}]","CANDELA_OUTCOMES_GUID":"","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-819","chapter","type-chapter","status-publish","hentry"],"part":805,"_links":{"self":[{"href":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/wp-json\/pressbooks\/v2\/chapters\/819","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/wp-json\/wp\/v2\/users\/1195"}],"version-history":[{"count":4,"href":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/wp-json\/pressbooks\/v2\/chapters\/819\/revisions"}],"predecessor-version":[{"id":1174,"href":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/wp-json\/pressbooks\/v2\/chapters\/819\/revisions\/1174"}],"part":[{"href":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/wp-json\/pressbooks\/v2\/parts\/805"}],"metadata":[{"href":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/wp-json\/pressbooks\/v2\/chapters\/819\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/wp-json\/wp\/v2\/media?parent=819"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/wp-json\/pressbooks\/v2\/chapter-type?post=819"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/wp-json\/wp\/v2\/contributor?post=819"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/wp-json\/wp\/v2\/license?post=819"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}