From an accounting standpoint, stockholders' investment and revenues increase the assets of the company without adding to the liabilities. Therefore according to the equation (A = L + E), equity must increase.
Similarly, issuing dividends and paying expenses pays cash out of the company, which decreases assets without changing liabilities. Therefore equity must decrease.
Another way to think of it is: what contributes to the company's profit and/or value, and what decreases these things? Well, revenues and people investing in the company are good (and therefore good for stockholders), and giving cash out and paying expenses are costs to the company (and therefore decrease value for stockholders).
The expenditure incurred prior to the incorporation of an enterprise is to be considered as a pre-incorporation capital expenditure. The expenditure incurred prior to the 'setting-up of business' is to be considered as a pre-operative capital expenditure.
Answer:
Cedrick's potential maximum liability = $50
Explanation:
Given:
$250 = a Blueminusray player
$600 = new set of tires
$200 = Cash withdrawal
$40 = interest charges
Find:
Cedrick's potential maximum liability
Computation:
Cedrick's potential maximum liability = Blueminusray player - Cash withdrawal
Cedrick's potential maximum liability = $250 - $200
Cedrick's potential maximum liability = $50
The size of the dividend per share of stock depend on : The corporation's profit
Dividend per share is calculated by : Total dividend / Total shares outstanding,
Which mean that dividend per share will increase if the total dividend increases.
Meanwhile total dividend will increased if the company gains more profit
