STOCK COMPANIF.s. 74,3 



tary indicated would be the capital stock of the corporation. Th3 amount 

 for which a Capital Stock account is credited is called the " Paid Up 

 Capital " of the Company. 



After the shares have thus all been issued and paid for, the Capital 

 Stock account is allowed to stand from year to year without an entry be- 

 ing made thereon, unless the capital stock of the corporation be dimin- 

 ished or int and then this account is debited or credited accord- 

 ingly. 



83. Gains and Losses and Surplus Fund. The gains and losses of 

 the corporation are first carried to a Loss and Gain account the same as in 

 anv other book-keeping ; but afterward when the net gain or the net loss 

 is found, unlike any other book-keeping, it is carried to a "Surplus Fund" 

 account, and in that account it is allowed to remain until a dividend is de- 

 clared by the Company, at which time this " Surplus Fund " account is 

 debited and a " Dividend " account is credited for the amount of such divi- 

 dend. Whenever the dividends are paid to the shareholders, the " Divi- 

 d>-nd " account is debited for such amounts ; therefore, when they have all 

 been paid, the " Dividend" account will just balance. 



H2-I. Tin-re is another method of disposing of the net gain, which 

 declare a dividend as soon as the net gain is found for a certain portion of 

 that gain ; then credit "Dividend" account for the amount of the divi- 

 dend thus declared, and " Surplus Fund" account for the balance; the 

 former method, however (823), is thought to be the better one. 



S',5.1. I ' '>i-'" lends. The dividend is seldom declared for the full amount 

 of the gain, for the reason that the Company wishes to reserve a portion 

 <>f the amount as a surplus fund, against which they may draw at such 

 times as tin- net gain is not .sufficient to make up the customary rate per 

 cent, of dividend which is at regular intervals deelan-d by the Companv. 

 For example : If a < 'ompany deelarea five per cent, dividend smii-annually 

 and th<- numb.-r of slian- by this Company reipiiiv at this per cent. 



a dividi-nd to the amount of 815,000 and the m-t -.r-un of th.- ( ', .inpany be 

 only SliMXX), th-n th.' 'Surplus Fund" account must be drawn on to the 



<>00. 

 . final iv>uit ,,f bhe Company's business be a i\' the entire 



Pied from tin- Loss and (Jain aerount to 

 the debit side of th>- " Sin-plus Fund " a<vount. 



1 'ompanies declare dividends s.-mi-annually. BOOM iu.irt-rly, 

 and a few monthly, while others h ive no stated times in which to dee! 

 th<-m. but do BO only at such times as it is tin- i^nera! wish of the st 

 holders BO t - 



