---
title: "ACCT 101, Session 3: Financial statements; Equity"
author: 
  - name: Dr. Richard M. Crowley
    email: rcrowley@smu.edu.sg
    affiliation: https://rmc.link/
title-slide-attributes:
  data-background-video: "../Backgrounds/title.mp4"
  data-background-video-loop: "true"
  data-background-size: stretch
format:
  revealjs:
    theme: default
    css: quarto_white.css
    navigation-mode: vertical
    controls: true
    transition: slide
    background-transition: fade
    transition-speed: default
    width: 1536
    height: 864
    logo: ../Logos/logo2.png
    code-link: true
    code-line-numbers: false
    chalkboard:
      theme: whiteboard
    auto-stretch: false
    verticator:
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revealjs-plugins:
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execute:
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editor: source
---

# Front matter {data-background-video="../Backgrounds/section.mp4" data-background-video-loop="true"}


<!--# Note that the downlit and xml2 pacakges are required to compile -->
<!--# Installed extensions include `attribution`, `qrcode`, and `material-icons` -->

```{r helpers, echo=FALSE, warning=FALSE, message=F}
library(knitr)
library(kableExtra)

#' Pretty formatted HTML tables
#' 
#' @param df The dataframe to format as a table
#' @param names Names to use for columns if not using the df column names. Vector
#' @param highlight_cols Columns to highlight. Default is c(1) for highlighting the first row. Use c() to remove.
#' @param highlight_rows Rows to highlight. Default is c() to not highlight any rows.
#' @param color_rows Rows to highlight in color. Default is c() to not highlight any rows.
#' @param highlight_end_rows Rows to highlight. Uses a reverse indexing where 1 is the last row, 2 is second to last, etc.
#' @param full Use to span the full width of a slide. FALSE by default.
#' @param fixed_header Whether the first row should be treated as a header row. TRUE by default.
html_df <- function(df, names=NULL, highlight_cols=c(1), highlight_rows=c(), color_rows=c(), highlight_end_rows=c(), full=F, fixed_header=T) {
  if(!length(names)) {
    names=colnames(df)
  }
  kbl(df,"html", col.names = names, align = c("l",rep('c',length(cols)-1))) %>%
    kable_paper(c("striped","hover"), full_width=full, fixed_thead=F, html_font = "\"Source Sans Pro\", Helvetica, sans-serif") %>%
    {if(length(highlight_cols)) column_spec(., highlight_cols,bold=T, background = "#ffffff99") else .} %>%
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    {if(length(color_rows)) row_spec(., color_rows,bold=T, background = "#aaaaff99") else .} %>%
    {if(length(highlight_end_rows)) row_spec(., nrow(df) + 1 - highlight_end_rows,bold=T, background = "#ffffff99") else .}
}

library(tidyverse)

library(quantmod)
library(curl)
Quote <- function(name) {
  if(has_internet()) {
    quote <- getQuote(name)
    saveRDS(quote, paste0(name,'_quote.rds'))
  } else {
    quote <- readRDS(paste0(name,'_quote.rds'))
  }
  quote
}
```

<!--# List packages here that are not being correctly highlighted -->
<!--# The usual cause is calling the library from a echo=FALSE cell -->

```{r}
#| include: false
options(downlit.attached = c("knitr", "kableExtra", "tidyverse"))
```

<!-- "reveal_plugins:..." and "chalkboard:" are handled by prep.py -->
```{r setup, include=FALSE}
library(reticulate)  # To use python in R Markdown
# Python to use is specified in the .Renviron file
```

## Front matter {data-background="../Backgrounds/default.jpg"}

- Homework 1 should be submitted soon
    - Submit on eLearn if you haven't
- Homework 2 due next week
    - Looking through real annual reports
    - Largely open ended and will be graded for completion
        - Some questions ask for your own opinion -- there is no explicitly correct answer to these, since everyone has their own preferences
    - Look for it on eLearn


## Learning objectives {data-background="../Backgrounds/default.jpg" .small}

:::: {.columns}

::: {.column width="50%"}
![](../Course_Diagrams/ACCT_101_course_map_3.png){width="450px" fig-align="center"}
:::

::: {.column width="50%"}

Financial Statements (Ch 3)

1. Appreciate annual reports as a communication tool
2. Understand the presentation of the Statements of:
    - Financial Position
    - Comprehensive Income
    - Changes in Equity

Equity (Chapter 10)

1. Learn about the share structure of a corporation
2. Account for changing capital structure and dividends


:::

::::



# Annual reports {data-background-video="../Backgrounds/section.mp4" data-background-video-loop="true"}

## What's included {data-background="../Backgrounds/default.jpg"}

@. Corporate information
    + Name(s), history, key management/directors, structure
    + Awards, company description, operating statistics
@. Letter to shareholders
    + Written by CEO, sometimes by other executives as well
@. Management Discussion and Analysis (MD&A)
    + Management writes this section
    + Often discuss:
        * The year's performance
        * Possible future risks

## What's included {data-background="../Backgrounds/default.jpg"}

@. **Explicit and unreserved** statement of compliance to financial reporting standards.
@. Accounting statements
    + Statement of comprehensive income
    + Statement of financial position
    + Statement of changes in equity
    + Statement of cash flows
@. Statement notes
    + Often quite long, substance focused
    + Discusses important but difficult matters
    + Cannot rectify inappropriate accounting treatments
@. Acknowledgement of responsibility by management

## Why are these important? {data-background="../Backgrounds/default.jpg"}

- If you ever need information about a company's financial standing, the annual and quarterly reports are your primary source.
    - Alongside press releases and conference calls hosted by the company, often in parallel
- If you get information elsewhere (Bloomberg, Morningstar, etc.)...
    - They got it from there
        - Or from someone else who got it from there
- Contains a lot of other useful information about the companies

## What you can find {data-background="../Backgrounds/default.jpg"}

- Financials
- Risks to the company going forward
- Legal issues
- Corporate strategy
- The company's major customers
    - Very helpful for checking out competitors...
- Plenty more!

## Case: A good report (DBS)  {data-background="../Backgrounds/case.jpg"}

- <a href="https://www.dbs.com/annualreports/2016/pdf/dbs_annual_report_2016.pdf">Full 2016 report here</a>
- <a href="https://www.dbs.com/annualreports/2016/index.html">Web version here</a>

## Case: A bad report (Groupon) {data-background="../Backgrounds/case.jpg"}

<p class="leftalign">
<a href="https://www.sec.gov/Archives/edgar/data/1490281/000104746911005613/a2203913zs-1.htm">SEC filing S-1 1 a2203913zs-1</a>
</p>

> We use **adjusted consolidated segment operating income**, or Adjusted CSOI, and free cash flow as key non-GAAP financial measures. Adjusted CSOI and free cash flow are used in addition to and in conjunction with results presented in accordance with GAAP and *should not be relied upon* to the exclusion of GAAP financial measures.

- [End result](https://www.wsj.com/articles/SB10001424053111904006104576499962706947324)
- [Follow up analysis](http://blog.auditanalytics.com/non-gaap-measures-useful-tool-or-red-flag/)
- [Video discussion by 60 Minutes](https://youtu.be/tgeh607ZXA0?t=496)

# Financial statements {data-background-video="../Backgrounds/section.mp4" data-background-video-loop="true"}

## General requirements {data-background="../Backgrounds/default.jpg"}

- Name of reporting entity, date ended, currency used, level of rounding
    + Or individual entity ("Consolidated report for...")
- Can group similar accounts together if immaterial
    + Not disclosing separately has no impact on F/S users
    + Cannot offset liabilities with assets, unless allowed
        * IAS 16, IAS 18
        * Foreign exchange gains and losses
- Must be done *at least* yearly (fiscal year)
- Usually provides comparative information for the past two periods

## Statement of financial position (SFP) {data-background="../Backgrounds/default.jpg" .small}

- Also known as a Balance Sheet (B/S)
- Presents:
    - Non-current assets (> 1 year in life)
        - PP&E, intangible assets
    - Current assets
        - Cash (and equiv), trade, other financial assets, biological assets, typical inventory items (e.g., t-shirts), receivables
    - Long term (> 1 year until paid off), then current liabilities
        - Provisions, other financial liabilities
    - Equity
        - Non-controlling equity interests, issued capital, reserves
        - Retained earnings

> Presents companies' *stock* of assets, liabilities, and equity

> <p style="margin:0px;font-size:0.6em">Technically inventory that usually takes more than 1 year to sell (e.g., a nuclear submarine) can be considered as a non-current asset</p>

## How to construct an SFP {data-background="../Backgrounds/reference.jpg" .small}

:::: {.columns}

::: {.column width="50%"}

1. Start with an adjusted trial balance
2. List all long term assets and sum
3. List all short term assets and sum
4. Total all assets
5. List all long term liabilities and sum
6. List all short term liabilities and sum
7. Total all liabilities
8. List retained earnings
9. List capital accounts
10. Total all equity accounts
11. Sum Total liabilities and equities
12. Verify $A = L + E$

:::

::: {.column width="50%"}

![](../Diagrams/Balance_sheet.png){width="370px" fig-align="center"}

:::

::::


## Statement of Comprehensive Income (SCI) {data-background="../Backgrounds/default.jpg"}

- Also known as an Income Statement (I/S)
- Presents:
    - Revenue
    - Expenses, categorized by nature or function
        - Operating expenses
        - Non-operating expenses
    - Net income
    - Below or separately it presents:
        - Gains and Losses
        - Called other comprehensive income (OCI)

::: {.callout-note}
## Taxes

While taxes are always included, you will not be asked to calculate taxes for this course.  If no taxes are mentioned, assume they are 0.

:::

## Constructing an SCI {data-background="../Backgrounds/reference.jpg" .small}

:::: {.columns}

::: {.column width="50%"}

1. Start with an adjusted trial balance
2. List revenue
3. List cost of goods sold (COGS)
4. Calculate *gross profit* (revenue - COGS)
5. List other expenses (exc. interest & taxes)
6. List other revenues (exc. interest & other holdings)
7. Calculate *operating profit*
8. List other non-tax expenses and incomes
    - Those that aren't included above
9. Calculate *income before taxes*
10. List taxes
11. Calculate *net income (loss)*
12. Optional: Start a new page
13. List OCI items (gains and losses)
14. List tax on OCI
15. Calculate *OCI, net of tax*
16. Calculate *total comprehensive income*
    - OCI, net of tax + net income (loss)

:::

::: {.column width="50%"}

![](../Diagrams/Income_statement.png){width="370px" fig-align="center"}

:::

::::


## Statement of Changes in Equity {data-background="../Backgrounds/default.jpg"}

- Reconciles from period start to end
    - Per IAS 1,must reconcile each equity item separately as well as the total
- Shows all transactions with owners
- Shows all dividends paid (can be as a note to the statement)
- This statement often relies on information that is contained outside the adjusted trial balance

::: {.callout-tip}
## Not tested

You won't be required to construct this statement for exams.

:::


## Constructing an SCE {data-background="../Backgrounds/reference.jpg" .small}

:::: {.columns}

::: {.column width="50%"}

1. List all equity items across the top as columns
    - Generally includes: Share capital, APIC, retained earnings, treasury stock, total equity
2. Put "Balance as of [beginning date]" as the first row
3. List all items that affected 1 or more columns' values for the year as the rows
    - Generally includes: Share issuance, treasury share sales, dividends paid, net income
4. Put "Balance as of [ending date]" as the last row
5. Fill out all changes
6. Often includes the prior year as well

:::

::: {.column width="50%"}

![](../Diagrams/SCE.png){width="600px" fig-align="center"}

:::

::::



## Statement of Cash Flows {data-background="../Backgrounds/default.jpg"}

- We'll get back to this...
    - Sessions 10 and 11
    - Chapter 11

## Practice {data-background="../Backgrounds/group.jpg"}

- Practice problem on eLearn for Coffee Corp (last week's company)

1. Construct a Statement of Financial Position
    - Use the adjusted trial balance
    - Do for 20X8
2. Construct a Statement of Comprehensive income
    - Use the adjusted trial balance
    - Do for 20X8
    - Ignore taxes
3. If you have time, go back and do for 20X9 too!

> There is an Excel file on eLearn with the adjusted trial balances for 20X8 and 20X9.

# Financing {data-background-video="../Backgrounds/section.mp4" data-background-video-loop="true"}

## Financing types {data-background="../Backgrounds/default.jpg"}

![](../Diagrams/Financing.png){width="800px" fig-align="center"}


## Issuing shares {data-background="../Backgrounds/default.jpg" .never visibility="hidden"}

- Companies can issue shares from treasury or unissued shares
- Factors in issuing shares:
    1. Company's current health
    2. Company's outlook
    3. Expected dividends
    4. Economy health
    5. Market factors (liquidity)

## Equity vs debt {data-background="../Backgrounds/default.jpg"}

:::: {.columns}

::: {.column width="50%"}

**Equity**

- Advantages:
    - No legal obligation to distribute profits
        - Great for growth
    - All profit can be reinvested
- Disadvantages:
    - Dilutes existing shareholders' ownership
        - Decreases the % of the company they own
    - More expensive
    - Can only be issued by a corporation

:::

::: {.column width="50%"}

**Debt**

- Advantages
    - Shareholders maintain ownership
    - Can be quicker to receive financing
- Disadvantages
    - Often need to pay periodic interest
        - Requires cash on hand to pay
        - Solvency risk $\Rightarrow$ bankruptcy

:::

::::



## Articles of Incorporation {data-background="../Backgrounds/default.jpg"}

:::: {.columns}

::: {.column width="50%"}

- Equity is governed by a corporation's *articles of incorporation*
    - Also known as a *corporate charter*
- Written at the time of incorporation
    - When the company is created
- Governs:
    - Nature of business activities
    - Number of shares of stock
    - Initial board of directors

:::

::: {.column width="50%"}

<object data="../Documents/Starbucks_Incorporation.pdf" type="application/pdf" width="100%" height="500px">
 <a href="https://www.starbucks.com/about-us/company-information/corporate-governance"><img src="../Documents/Starbucks_Incorporation.png" width="100%" height="800px"></img></a>
</object>

:::

::::




## Corporations {data-background="../Backgrounds/default.jpg"}

:::: {.columns}

::: {.column width="50%"}

**Advantages**

- Can raise both equity and debt
- Continuous life
- Ownership is liquid
- Limited liability for owners

:::

::: {.column width="50%"}

**Disadvantages**

- Separation of ownership and management
    - Leads to conflicts of interest
- Other tax policies apply
    - *Double taxation*: A corporation's income is taxed and dividends to investors are taxed
        - Generally not an issue in Singapore
- More government regulation

:::

::::


## Corporations {data-background="../Backgrounds/default.jpg"}


:::: {.columns}

::: {.column width="50%"}

**Public**

- Public investment
- No cap on # of shareholders
- Increased regulation

![](../Figures/Microsoft.png){height="80px" fig-align="center" style="margin:0px"}

![](../Figures/Walt_Disney.png){height="80px" fig-align="center" style="margin:0px"}

![](../Figures/Starbucks.png){height="100px" fig-align="center" style="margin:0px"}

:::

::: {.column width="50%"}

**Private**

- No public investment
    - Some exceptions to this
- Fewer shareholders
- Less regulated

![](../Figures/Cargill.png){height="80px" fig-align="center" style="margin:0px"}

![](../Figures/Koch.png){height="80px" fig-align="center" style="margin:0px"}

![](../Figures/Valve.png){height="80px" fig-align="center" style="margin:0px"}

:::

::::


## Shareholder rights {data-background="../Backgrounds/sword-shield.jpg"}

:::: {.columns}

::: {.column width="50%"}
**Voting**

- For board of directors
- For important events

:::

::: {.column width="50%"}

**Dividends**

- Right to share in profits (when dividends are declared)

:::

::::

:::: {.columns}

::: {.column width="50%"}
**Liquidation**

- Right to share in asset value if company liquidates
    - After lenders get their share of value

:::

::: {.column width="50%"}

**Limited liability**

- Can only lose what was originally invested

:::

::::

> How shareholders protect themselves


## Share types {data-background="../Backgrounds/default.jpg"}

:::: {.columns}

::: {.column width="50%"}

**Ordinary shares**

- Standard share type (most common)
- Has the four basic shareholder rights
- Benefits the most if the company succeeds
    - Takes on the most risk

:::

::: {.column width="50%"}

**Preferred shares**

- Limited/no voting rights
- Earns a fixed dividend
    - Receives dividends before common shares
- Receives assets before common shares in liquidation
- May have other rights (convertible, redeemable, cumulative)
    - Varies from company to company

:::

::::



## Equity financing example: Facebook {data-background="../Backgrounds/case.jpg"}

[![](../Figures/facebook_valuation.jpg){width="800px" fig-align="center"}](https://beta.techcrunch.com/wp-content/uploads/2011/01/facebookgraph-r7big.jpg)

> Source: https://techcrunch.com/2011/01/10/facebook-5/

# Accounting for equity {data-background-video="../Backgrounds/section.mp4" data-background-video-loop="true"}

## Number of shares {data-background="../Backgrounds/reference.jpg"}

![](../Diagrams/Share_number.png){width="800px" fig-align="center"}

## Accounting for common stock {data-background="../Backgrounds/default.jpg"}

- *Singapore does not allow the par value method*
    + Still allowed in many countries
    + The book uses this mostly, so ignore the book on this topic!!!
- Simpler treatment in Singapore
- Note: The book uses the account name *Common stock*, which is commonly used in the U.S.

> <p style="margin:0px;font-size:0.6em">Situation: The company issued 1 million ordinary shares at $15 each.</p>

![](../Diagrams/JE_3-1.png){width="800px" fig-align="center" .fragment .lightbox}


## Par value method (NOT ALLOWED IN SG) {data-background="../Backgrounds/default.jpg"}

- Separate accounts for par capital and above-par capital
- Note: The book uses the account name *Additional Paid-in Capital*, which is common in the U.S.

> <p style="margin:0px;font-size:0.6em">Situation: 1) The company issued 1 million ordinary shares at $15 each with par value of $15.<br>2) The company issued 1 million ordinary shares at $15 each with par value of $1.</p>

![](../Diagrams/JE_3-2.png){width="800px" fig-align="center" .fragment .lightbox}

## Par value {data-background="../Backgrounds/default.jpg"}

- *Par value* is a value of a share of stock stipulated in the corporation's articles of incorporation
    - It has no relationship with the market value of the stock (stock price)\
    - Ex.: Facebook has a par value of USD 0.000006/share
- Not used in Singapore since 2005

<div class="fragment present-only">

```{r, eval=F}
#Quote('META')
```

```{r, echo=F}
readRDS('META_quote.rds')
```

</div>

## Accounting for preferred stock {data-background="../Backgrounds/default.jpg"}

- Using the same numbers as the common stock example
- Note: The book uses the U.S. account name, *Preferred stock*

> <p style="margin:0px;font-size:0.6em">Situation: The company issued 1 million preferred shares at $15 each.</p>

![](../Diagrams/JE_3-3.png){width="800px" fig-align="center" .fragment .lightbox}

> We almost always treat preferred shares as **equity**

> <p style="margin:0px;font-size:0.6em">The exception (IAS 32) is for redeemable shares with fixed redemption date and fixed dividend payments</p>

## Treasury stock {data-background-image="../Backgrounds/treasury.jpg"}

- Common stock that has been repurchased
- Reasons for repurchasing:
    1. Issue incentive compensation
    2. Increase stock price
        - By distributing cash to shareholders
    3. Use in trading
    4. Increase EPS
    5. Remove a shareholder (defensive)

## Treasury stock: Retirement {data-background="../Backgrounds/default.jpg"}

- Retirement removes the shares from share capital entirely

> <p style="margin:0px;font-size:0.6em">Situation: The company purchased 20,000 shares at $20 each, and then retired them.</p>

![](../Diagrams/JE_3-4.png){width="800px" fig-align="center" .fragment .lightbox}

> Treasury shares: *contra equity* account, decreasing equity

## Treasury stock: Reissuing at a profit {data-background="../Backgrounds/default.jpg"}

> <p style="margin:0px;font-size:0.6em">Situation: The company purchased 20,000 shares at $20 each, and then sold them in 2 transactions: 10,000 for $25 each and 10,000 for $15 each.</p>

![](../Diagrams/JE_3-5.png){width="690px" fig-align="center" .lightbox}

![](../Diagrams/JE_3-6.png){width="690px" fig-align="center" .fragment .lightbox}



## Treasury stock: Reissuing at a loss {data-background="../Backgrounds/default.jpg"}

> <p style="margin:0px;font-size:0.6em">Situation: The company purchased 20,000 shares at $20 each, and then sold them in 2 transactions: 10,000 for $15 each and 10,000 for $25 each.</p>

![](../Diagrams/JE_3-7.png){width="690px" fig-align="center" .lightbox}

![](../Diagrams/JE_3-8.png){width="690px" fig-align="center" .fragment .lightbox}


## Treasury shares: Summary {data-background="../Backgrounds/reference.jpg"}

- *Treasury shares* represents the issued shares held by the firm itself
- It is a contra equity because it takes away from owners' ownership

:::: {.columns}

::: {.column width="50%"}

"Profit" from treasury shares

- Not considered actual profit (won't hit the I/S)
- Can fill in prior "losses" in retained earnings
- Can add to *Additional Paid-in Capital* (APIC)

:::

::: {.column width="50%"}

"Losses" from treasury shares

- Not considered an actual loss (won't hit the I/S)
- Subtracts from APIC
- If APIC hits 0, subtract from *Retained earnings*

:::

::::

> All treasury shares transactions are based on actual amounts paid (market value)

## Treasury stock: Putting it all together {data-background="../Backgrounds/default.jpg"}

> <p style="margin:0px;font-size:0.6em">Situation: The company purchased 20,000 shares at $20 each, and then sold them in 3 transactions: 5,000 for $15 each, 5,000 for $26 each, and 10,000 for $18 each.</p>

![](../Diagrams/JE_3-9.png){width="750px" fig-align="center" .fragment .lightbox}

## Treasury stock: Illustrated {data-background="../Backgrounds/default.jpg"}

![](../Diagrams/Treasury_share_transactions.png){width="800px" fig-align="center"}



## Dividends {data-background-image="../Backgrounds/dividends.png"}

- Cash dividends
    - Final dividend: year end, policy voted on by shareholders
    - Interim dividends: declared by board of directors
    - Need to have enough retained earnings on hand to declare the dividend
    - Need to have enough cash on hand to pay the dividend
- Share dividends
    - Proportional distribution of shares to shareholders
    - Shifts retained earnings to share capital
        - Increases number of outstanding shares

## Dividends timeline {data-background-image="../Backgrounds/reference.jpg"}

![](../Diagrams/Dividends_timeline.png){width="1000px" fig-align="center"}

## Recording cash dividends {data-background="../Backgrounds/default.jpg"}

> Situation: declared $0.10 per share of dividends on Jan 1, with record date of Jan 15 and payment date of Jan 30.  100,000 shares are outstanding.

![](../Diagrams/JE_3-10.png){width="800px" fig-align="center" .fragment .lightbox}

## Recording share dividends {data-background="../Backgrounds/default.jpg"}

- Shifting of values within equity accounts only
    - Record at market value

> Situation: declared 0.05 shares per share as a share dividend on Jan 1.  100,000 shares are outstanding with a market value of $10 each.

![](../Diagrams/JE_3-11.png){width="800px" fig-align="center" .fragment .lightbox}

## Stock split {data-background-image="../Backgrounds/split.png"}

- Exchange all common shares at a certain ratio
    - Such as a 2 for 1 stock split: receive an additional 1 share for every share owned
    - Not substantively different from a stock dividend
        - Just a larger change in the number of shares outstanding
- No accounting effects
- No journal entry

## Summary of transactions {data-background-image="../Backgrounds/reference.jpg"}

```{r , echo=FALSE, warning=FALSE}
options(knitr.table.format = "html") 
text <- data.frame(
  def = c("Issue shares","Purchase treasury shares","Sell treasury shares","Declare dividends","Pay dividends","Issue share dividends","Stock split"),
  asset = c("↑","↓","↑","--","↓","--","--"),
  liability = c("--","--","--","↑","↓","--","--"),
  equity = c("↑","↓","↑","↓","--","--","--")
)
html_df(text, highlight_cols = c(1), names=c("Transaction","Asset (↑=DR)","Liability (↑=CR)","Equity (↑=CR)"))
```

## Practice questions {data-background="../Backgrounds/group.jpg"}

- Take 5-10 minutes to work on this in groups

> <p style="margin:0px;font-size:1em">Caffeine & Co had 50,000 shares outstanding as of Jan 1, 20X8.  The following transactions occurred throughout the year.  Prepare the journal entries for each transaction.</p>

1. On January 30, Caffeine & Co purchased 10,000 shares for \$10 per share.					
2. On March 30, Caffeine & Co sold 2,000 treasury shares at \$8 per share.					
3. On April 1, Caffeine & Co declared a dividend of \$0.05 per share.  The date of record was April 15th, with payment on May 30th.					
4. On May 1, Caffeine & Co sold 6,000 treasury shares at \$15 per share.					
5. On May 30, Caffeine & Co paid the previously declared dividend					
6. On October 31, Caffeine & Co sold its remaining 2,000 treasury shares at \$8 per share.		

## {data-background="../Backgrounds/graph_paper.png" class="print-only"}

## Practice questions {data-background="../Backgrounds/answer.jpg" class="default exclude"}

![](../Diagrams/Equity_exercise_answer.png){width="900px" fig-align="center" .lightbox}





# End matter {data-background-video="../Backgrounds/section.mp4" data-background-video-loop="true"}

## Wrap up {data-background="../Backgrounds/ending.jpg"}

- For next week
    1) Recap the reading for this week
    2) Read the pages for next week
        - Control Systems (Chapter 4)
    3) Homework to *turn in next week*
        - Available on eLearn
        - Submit on eLearn
    4) Practice on eLearn
        - Extra Excel practice on B/S and I/S
        - Practice on both F/S and equity
        - Automatic feedback provided
- Survey on the class session at [rmc.link/101survey3](https://docs.google.com/forms/d/e/1FAIpQLSdzyohx5MTN40nrDxCWRfuyapH7b1N6NG6MQqV6-lMMNT9z2Q/viewform?usp=sf_link)

## Packages used for these slides {data-background="../Backgrounds/code.jpg"}

- `{curl}`
- `{kableExtra}`
- `{knitr}`
- `{quantmod}`
- `{revealjs}`




## References {data-background="../Backgrounds/books-old.jpg" .never .small visibility="hidden"}

## Custom code {data-background="../Backgrounds/code.jpg" .never .small visibility="hidden"}

<small style="width:100%">
```{r, eval=F}
# Pull and cache stock quotes
library(quantmod)
library(curl)
Quote <- function(name) {
  if(has_internet()) {
    quote <- getQuote(name)
    saveRDS(quote, paste0(name,'_quote.rds'))
  } else {
    quote <- readRDS(paste0(name,'_quote.rds'))
  }
  quote
}
```
</small>

## NOTES {class="never" visibility="hidden"}


- Delete the slide "Equity details"
- Make a graph (continuum) of T/S effects showing negative side is retained earnings, positive side is APIC. Starting point it 0

Debit Credit song: https://www.youtube.com/watch?v=j71Kmxv7smk


