Introduction
Shareholders’ equity (SE) represents monetary contributions of a company’s equity (stock) owners, in addition to income from the course of operations (Exhibit 6.20). Along with liabilities, SE forms another major source of funding for companies. Shareholders’ equity represents the residual value (net worth) of assets by the shareholders following the repayment of liabilities: Assets – Liabilities = SE.
Liabilities and stockholders’ equity | |||||
Current liabilities: | |||||
Accounts payable | $ 1,717 | 2,086 | |||
Accrued compensation | 1,339 | 1,662 | |||
Income taxes | 3,478 | 2,020 | |||
Short-term unearned revenue | 6,514 | 7,502 | |||
Other | 1,921 | 3,607 | |||
Total current liabilities | 14,969 | 16,877 | |||
Long-term unearned revenue | 1,663 | 1,665 | |||
Other long-term liabilities | 2,911 | 4,158 | |||
Commitments and contingencies | |||||
Stockholders’ equity: | |||||
Common stock and paid-in capital - shares authorized 24,000; outstanding 10,862 and 10,710 | 56,396 | 60,413 | |||
Retained earnings (deficit), including accumulated other comprehensive income of $1,119 and $1,426 | 18,429 | (12,298) | |||
Total stockholders’ equity | 74,825 | 48,115 | |||
Total liabilities and stockholders’ equity | $94,368 | $ 70,815 |
Source: Used with permission. Microsoft 2005 Annual Report.
SE usually consists of:
Common Stock and additional Paid-In Capital
Preferred Stock
Treasury Stock
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