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Stockholders' Equity, Preferred Stock, Treasury Shares, EPS

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What are stockholders' equity, preferred stock, treasury shares, basic and diluted earnings per share? I'm looking at Merck's 2012 annual report.

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Solution Summary

A few paragraphs describes simply what each term is. A set of journal entries is given to illustrate treasury shares.

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As you see for Merck (from 2012 annual report), they do not have preferred stock. If they did, it would be reported above common stock in the equity section. Preferred shares have a maximum dividend per share and special rights.

Treasury shares are ...

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Carol Sargent, PhD
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  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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